It’s Almost the End of Year. Here’s Your Financial Checklist with 6 Steps to Get Prepared.
Sadly, summer is behind us (unless you live below the equator). And with school and after-school activities in full swing and holidays approaching, the last thing you probably want to think about right now is finances. You’d probably rather be hanging out in flip flops as long as you can. But by taking just a few minutes today, you can help prepare for your transition into the end of the year with your personal financial checklist. Think of this way: You can get a quick start on your New Year’s resolutions by starting now. So here we go: 6 steps that can help you get prepared for fall (well, financially that is).
#1) Look back and assess
It’s easy to lose track of your spending in summer and certainly end-of-summer shopping for school supplies doesn’t help. So take the time now to see where your money actually went the past few months. This will help you figure out how much you may need for the rest of the year, and also give you some insight so you can fine tune your spending next summer.1
#2) End-of-year cash goal
How much money do you want to have saved by end of year? There’s a bunch of studies that show how bad American’s are at saving, in fact a recent one from the Federal Reserve drew a lot of attention with this statistic: 44% of Americans surveyed do not have enough money saved to cover a $400 emergency.2
How much can you set aside for the next few months? Whether you’re saving for an emergency fund or something else, now can be a good time. It’s always good to have goals. So, start saving. Don’t worry that you don’t have all the cash to pay for holiday shopping yet or that you don’t have three months of fixed household expenses set aside. Simply start.
#3) Can you cut stuff?
As your needs change in life, it helps to re-evaluate your expenses. Are there any ongoing monthly costs you can chop? Is there a gym membership you’re not using? Any random subscriptions you can nix?
It’s also a good time to look at your fixed expenses. Try to find a better rate on your car insurance, or if you have credit card debt, consider consolidating it to a card with a lower interest rate. Same for your mortgage. Rates are still pretty low and a refinance may still make sense. You can even call your cable provider to ask for better deals. Trimming down unnecessary costs is a great way to lighten the load.3
#4) Check in on your retirement savings
Knowing how much you’re putting into retirement savings today can help set yourself up for financial success in the future. Do a quick check-up on your contributions to make sure you’re on track for your retirement goals.4
Ideally, you should be targeting ten percent (10%) of your pre-tax earnings for retirement savings.
And if you don’t know your goals or “Your Number”, then sit down with a qualified financial planner who may be able to help.
#5) Get prepared for Tax Season
Tax season might seem luxuriously far away, but it will be here before you know it. Before the IRS begins accepting returns, it’s a good idea to audit your own situation and take action now, if needed.
1.) Get Organized;
2.) Think Now About Extensions Beyond the April 17, 2018 Filing Deadline;
3.) Review Your W-4 and Adjust Your Withholdings;
4.) Research Tax Preparers and Services – Tax planning and tax preparation are not the same thing and not everyone provides both services;
5.) Check for Deductions and Make a File with Needed Documents (see #1);
6.) Start Saving or at least don’t be shocked by the fee to prepare your taxes – the national average for a basic tax return (1040A and state return) is $176 and the cost goes up for more complex returns: Itemized 1040 with Schedule A and one state return is $273 (national average) and $457 for itemized 1040 with Schedule C Business Income or Capital Gains. Other schedules and other state tax returns will likely increase the fee.
#6) Non-financial goals are important, too
Forget finances for a minute — what do you want to accomplish in terms of personal ambitions before 2017 is over?
- Do you want to start a side business?
- Is there a hobby you’d like to take on?
• Want to adjust your work-life balance?
• Want to work out more?
Consider mapping out a rough plan. Don’t go crazy, just give yourself a mini goal that’s doable.
Getting your ducks in a row is an easy way to help you feel more on top of your game. It doesn’t take long, and will help you ease into end-of-year mode and into 2018.
If you’d like an objective second opinion about your finances, please reach out to Steve Stanganelli, CFP®, CRPC®, AEP® at Clear View Wealth Advisors, LLC. Email him at Steve@ClearViewWealthAdvisors.com.