Your finances don’t have to take a hit just because it’s December. With a little planning, you can handle all the gifts and celebrations while staying in budget. It’s also a great time to give to charity. While you’re at it, you can take a few simple steps to improve your tax situation for the year.
Here’s a quick action plan:
- Look for good deals on gifts. Black Friday is over, but some sales remain. If you still have presents to buy, search them out. Look online and in-person, and don’t forget to check for coupons.
- Limit the number of gifts on your list. If you have a large family – and therefore a long list of gifts to buy – consider suggesting a Secret Santa arrangement for the adults in the family. These arrangements also work well for groups of coworkers and even friends.
- Donate to charity. Being careful with money doesn’t mean you have to be a scrooge. This is known as a season of giving, after all, and you can balance generosity with frugality. Instead of giving to every charity that crosses your path, decide on a budget and pick out your preferred charities ahead of time. To make sure your money does what you want it to, do a little research. Organizations like Charity Navigator rate non-profits, so you can be confident your money is well spent.
- Get receipts for your donations. Money that you donate to a qualified charitable organization can be deducted when you file your income taxes. You can also deduct the fair market value of clothes, furniture, games and other items. This is a simple way to help both yourself and the non-profit of your choice.
- Make contributions to your retirement plan. If you have a 401(k), you can contribute up to $18,000 in 2017. Employees 50 or older can make an additional catch-up contribution of $6,000. If you haven’t reached your limit yet, try to make another contribution before the year ends. Because 401(k) contributions aren’t taxed, this will reduce your taxable income for the year.
- Use your Flexible Spending Account funds. If you have a Flexible Spending Account (FSA) through your employer, don’t let that money go to waste. Your employer may let you roll over $500 to the next year, or you may get a short grace period in 2018 to spend extra leftover funds, but that’s it. Any amount that isn’t used will disappear, and you can’t get a cash refund. Go ahead and get new glasses, have your teeth cleaned or see a chiropractor.
- Resolve to get your financial plan on track. If you’re ready to tackle new financial goals this year, PTT Financial is ready to help. Download our “6 Pillars of Financial Preparedness” report to learn more.