December 5th, 2014
It’s December and we’re almost at the end of the year. You’re probably starting to get into the swing of the holidays with cookie exchanges and parties galore. But let’s take a few minutes and look at some actions to make before the ball drops in Time’s Square to make your 2015 financially better.
If you haven’t run up your credit cards buying gifts, think about hiding them from yourself for the next few weeks and don’t increase them any more. And it may be painful, but take a hard look at how much credit card debt you have right now and the interest rate on each card. Your goal is to look at the cost of transferring the high interest amount to a lower interest card, and then have a plan to pay off the balance. Start with the highest interest rate first, even if it’s not the largest balance. Once you pay off one card, use the extra to pay off the next one. And don’t run up the balances again. Pay off the amount you charge every month. Being free of credit card debt gives you more options and freedom in life as well as a better credit score.
Even if you aren’t in debt, it’s good to know what you’re spending on average each month. That way, if you’re looking for more money for a home or a vacation, you know where to cut back. You could use something as simple as a spreadsheet or pay for a program like Quicken. There are even apps for your smartphones like Budgt that track how much money you have, what you’ve spent, and how much money you will have at the end of the month. It’s handy for checking your finances when you’re tempted to make that impulse purchase.
Estate planning is often ignored because it seems big, massive, huge or expensive. It’s the unknown. But it’s one of the best things you can do for yourself and your loved ones, and doesn’t have to be complicated.
First, spend some time learning the differences between wills and trusts. Then you could expand into living wills and powers of attorney but we won’t make it complicated.
Then, start asking for referrals for a good estate planning attorney or legal service. You don’t have to act on it yet. Just talk to the people and find out if any might work for you.
If you’re in debt, don’t do this. Your first priority is to get out of debt first. However, if you’re not in debt, find out how much more you can contribute this year, and work with your HR department or financial planner to bump up your contributions for the rest of the month. This will give you the benefit of a tax deferral, and you’re forcing yourself to save for your retirement.
Contrary to popular belief, you don’t have to have a lot of money to start investing. You could find an online broker to open up an account for only $500. Also, look into whether your company has any investment options as well.
Now is a good time to look at your life, auto, and homeowner’s (or renter’s) insurance. Evaluate your coverage and deductibles and see if you need to make some changes.