5 Things to Do with Your Money before the New Year

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Get Your Finances in Order before the New Year

Get Your Finances in Order before the New Year

No, this is not another article about how to save money on gifts. There are already way too many people out there whose only “financial” thought right now is whether to buy their nephew an expensive new iPad or stick with a cheaper video game. And while that’s an important decision, there are also a number of personal financial loose ends that you should be taking care of before the end of the year.

Here are some ways to save (or at least not lose) your hard-earned money:

Season of giving.

Do you itemize deductions on your income tax? If so, donating to a non-profit serves two purposes: you get to feel good for doing good and lower your taxes at the same time. Just be sure to check out the rules for donating from the IRS.

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Flex your (medical spending) muscles.

Remember that flexible spending health care account you signed up for at the beginning of the year? The one where you could put money into an account for medical expenses and not be taxed on it? Pretty great deal, right? It is, actually… if you use it. If not, most plans stipulate that you lose this money at the end of the year. So if you still have cash lying around in one of these accounts, now’s the time to get a checkup, buy a new pair of glasses or have that sore tooth looked at.

Get your house in order.

Tax season is just around the corner, so there’s never been a better time for you to get yourself organized. Balance your checking account. Make a monthly budget if you don’t already have one (and you should!). Get a free credit report from one of the three major credit bureaus via AnnualCreditReport.com and check it to ensure that all is well. Go over your tax situation and try to anticipate whether you will owe money or should expect a refund. If necessary, look into hiring a financial advisor (but remember to budget for it!).

Take a trip.

Huh? How does this save money? Because if your company has a “use it or lose it” policy on vacation days, you’re basically just giving them back part of your salary by not taking those days off. Even if you don’t have anywhere to travel for the holidays, use those vacation days and relax at home instead of heading to the office – or better yet, use the time to do some of the things listed above. You’ll be glad you did.

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The future is now.

If your company has a 401(k) and you haven’t reached you maximum contribution for the year, see if you can make a one-time payment into your account to do so. Or if that’s too pricy for you, consider increasing your current contribution level by a percent or two. Most year-end contributions to retirement accounts will lower your taxable income. Nice, right? And don’t just run out and spend any annual bonuses or gifts you may receive; instead, pay off any credit debt you have or invest that money in your 401(k) or an IRA.

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