You’ve survived Black Friday and Cyber Monday, and now you are looking at your holiday shopping and travel plans and (hopefully) checking your budget. It might seem like a busy time too focused on fun, but there are some 2018 year-end money moves you should make now. The deeper into December we go, the less time or inclination you will have to deal with these issues. And in some cases, after December might be too late. Let’s get started.
Assess Your 2018 Financial Plan Performance
Remember the plan you prepared at the beginning of the year? Now is the time to review your goals.
- How did you do?
- Did you reach your goals?
- If not, why?
- What concrete steps can you take to reach these goals in the coming year?
- Are they still relevant? Do you want to bring them forward into your 2019 financial plan?
Life changes. From year to year you will not have the same financial challenges, circumstances or perhaps even life vision. Your financial plan should be reviewed quarterly, but at the very least, the end of the year is a good time to assess and refresh.
Review Your 2018 Income and Expenses
Sit down and go over your actual income and expenses.
- Do they match what you budgeted?
- Were there any surprise expenses?
- Do you expect that these expenses will carry forward into 2019?
- How about income?
- Did you receive unexpected income?
- What did you do with it?
Will you end the year in the black or maybe even with a small profit? If you were in the negative, are there expenses you could reduce or eliminate?
Or, can you think of ways to increase your income? Raise? Side gig? New job? Additional education?
How did you do with your retirement savings goal? Have you maxed out on your retirement contributions? Here is an overview:
- IRAs: the maximum contribution for 2018 is $5,500, with some clarifications depending upon your income. Check with your accountant or someone knowledgeable. You have until April 15 to max out your contributions to your IRA. But you should make a plan now for how you will reach your target by that date.
- 401(k): You have until December 31 to max out your contributions to your employer-sponsored 401(k). The max is $18,500. Check with your HR department now to see where your account stands.
- HSA (Health Savings Account): When it comes to saving on healthcare costs, maintaining an HSA is one of the smartest financial moves you can make. A family is allowed to contribute a maximum of $6,900 in 2018 and an individual can invest a maximum of $3,450. If you have not set up an HSA, then this is one 2018 year-end money move you want to make now.
Several changes were made to the tax law by the Tax Cuts and Jobs Act that was passed by Congress at the end of last year. A critical 2018 year-end money move to make now is to review the changes with your accountant or tax preparer.
Your goal is to be sure that you have taken all the steps this year to soften your 2018 tax burden in light of these changes.
The new tax law changes income tax rates, standard and itemized deductions, personal exemptions, estate taxes and many other areas that will impact your money.
Among the 2018 year-end money moves to make now is to check in with your employer to be sure you are on target and receiving optimum benefits. Check each benefit package to make sure that it served you well this year, and if not start the process of making changes. For instance:
Health insurance: were all your medical needs covered?
Retirement: did HR introduce new retirement plans this year? Is it applicable to you? Can you improve? Did you take full advantage of your employer’s match?
Other perks: Did you take full advantage of any other benefits your employer offered such as reimbursement of transportation costs, education assistance, student loan repayment, gym memberships, etc.
How is Your Investment Portfolio?
If you were able to put some money into investment accounts this year, kudos! This means you are making great progress with your financial goals. Now is a good time to review your portfolio to make sure your investments are working at maximum optimization for your benefit. Meet with your financial advisor now to make any adjustments if necessary.
It may appear to be off-target but revisiting your holiday spending budget and plan is a key 2018 year-end money move to make now. You could easily blow the entire year of great effort and success in reaching your goals by over spending in December.
If you didn’t plan yet, start NOW.
Make your gift list, set maximum spending for each individual, look at your budget and commit to using cash or to charging only what you can repay within the first two months of 2019.
You don’t need to do this entire list of 2018 year-end money moves at once but make them a priority during the upcoming holiday month. Take one or two tasks at a time, go slowly, carefully review, strategize and complete.