If you want to give your New Year’s financial resolutions a boost, implement some financial improvements before the year is out.
Here are six easy-to-implement steps to help stimulate your net worth enter the new year.
1. Pay attention to your health insurance deductibles
Year-end financial planning strategies aren’t always so timely: “My son’s birthday is December 29th. Her due date was actually January 2, ”says Stacia Williams. “I begged my OB / GYN to go ahead and encourage me.”
She knew her due date was close enough that the doctor could be flexible. And she also knew that her insurance deductible would be reset on January 1, which meant she would have to pay out of pocket as she started to meet the New Year’s deductible.
“It saved us a ton of money,” says Williams. “He was my cheapest child!”
Williams is one of the founders and wealth advisor of the Williams Financial Group in Kansas City, Missouri, so she knows about these things. Suppose you have reached your annual deductible or are close to it. In that case, you might want to schedule some expensive medical procedures before the New Year begins, when your deductible will be reset and your out-of-pocket expenses could be much higher.
2. Use or lose your FSA balance
Being smart with your money often begins with employer-sponsored retirement, insurance, and health benefit programs, says Marc Scudillo, CPA and Certified Financial Planner at EisnerAmper Wealth Management in Iselin, New Jersey.
He says many early-career workers have high-deductible health insurance plans combined with some type of tax-efficient health savings account, such as a flexible spending account.
Many of these employer-sponsored health savings accounts are “use it or lose it,” Scudillo explains. If there is still a balance in the account at the end of the year, you can lose it. Some accounts have grace periods of around a few months, and some allow you to carry over at least some, if not all, of the balance into the new year.
Either way, you’ll want to review that balance and your options before you end up with neither.
3. Plan your vacation expenses
Williams says that budgeting for vacation expenses is a must so you can be sure you’re spending your disposable income and not dipping into the cash needed to cover necessities. It can be as sophisticated or as simple as you want, from a spreadsheet to an app that helps you track your spending.
She’s also a fan of cash back rewards and interest-free credit card promotions to help pay for holiday expenses (“it’s almost like a layaway”). Just be sure to calculate the payment that will be due so that you can be sure you can pay off the balance before the interest-free period ends. And keep an eye on your credit limits; having more than 30% of the limit of use of a card can start to hurt your credit score. But your score will rebound as you pay off the balance.
Williams recommends vacation savings accounts when planning for the next year. Some financial institutions offer incentives to open such accounts.
“That way, next year your vacation budget is pretty much already set, and you can add or take that out,” she says. While these savings accounts don’t earn a lot of interest, they’re just an automatic way to fund your vacation expenses up front.
4. Prepare for tax season now
“I always make sure my CPA makes a living,” says Williams. She does this by asking her tax advisor to send her a list of receipts and documents to collect that will be needed for her particular tax situation.
She also suggests using an app to scan and organize receipts rather than putting them in an envelope or box. This makes the collection process “manageable and easy”.
Workers in the gig economy should also be aware of the tax breaks and depreciation they are entitled to, says Scudillo – and have the receipts to back them up.
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5. Monitor your credit
Track your credit history and score are especially important at this time of year when fraud often seems to be on the rise.
“You can be proactive by downloading a free credit tracker app,” says Williams. She says any errors or discrepancies should be reported to the credit bureaus.
6. Keep your after-work life goals in mind
Check the pension plan’s limits and see if you can increase your contributions a notch or two.
“A year-end review that we often see with young professionals is that they get an increase in their pay over the course of the year – but have they also increased their savings? Scudillo asks.
Read: There is no New Year’s Day holiday for the stock market this year, here’s why.
He suggests seeing if your employer offers an automatic annual deferral increase to their 401 (k). Often referred to as an auto-escalation feature, this allows you to increase your employee’s contribution by a set amount each year, for example, 1% per year.
“We highly recommend it because it takes away that human inertia that people fall into,” says Scudillo. We often “delay, procrastinate or forget” to increase our savings as our income increases.
“I think a lot of times we don’t ask enough questions,” says Williams. She says people barely like looking at their retirement account statements, let alone calling and asking questions about how to invest. If your employer offers a 401 (k) plan, the investment company sponsoring the plan can be a great source of advice – and free.
Related: 4 end-of-year moves to do with your retirement portfolio
Scudillo has one final piece of advice: if you don’t have financial goals, set them.
“If we had a certain target amount that we wanted to save over the year, review: are we there? And if not, why not? “
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Hal M. Bundrick, CFP writes for NerdWallet. Email: [email protected] Twitter: @halmbundrick.