December is always a month that is riddled with important financial decisions, but most of them get pushed aside for the much more pleasant euphoria of the holiday season. The following are a few tips that can help you to stay focused and reap the rewards of making some smart financial moves in the midst of all the chaos.
1. Assess Your Debt Obligations
When you are surrounded by all the things you want to buy for around the house or gifts you just need to get for friends and family, probably the last thing you want to look at is how much money you owe, but doing this might save you from spending money you should really put towards debt payments. It is also simply good practice to reset your goals for the following year by looking at what you have accomplished and how much further you still need to go.
2. Reevaluate Your Asset Allocation
If you are getting closer to retirement you may want to move your focus to assets that are less risky. You may also need to look at the performance of the funds where your money is held to make a decision on whether or not to continue or to find something more suitable to your goals. The end of the year is a great time to assess the performance of the past twelve months and make those decisions.
3. Take Advantage of Tax Credits Before they Expire
You may be able to take advantage of some last minute tax credits before the new year rolls around. For instance, if you can put a little extra into your annuity before December 31st you can claim a deduction if one is allowed in your tax regime. Similarly, by postponing income if you are self-employed, simply by sending out invoices late in December, you can reduce your taxable income for the year. Other tax credits may be available on energy saving appliances or other allowances that will not carry over into the following year. Assessing your tax situation now can save you money later.
4. Spend Only on What’s Necessary
This might seem like the hardest thing to do when everywhere you turn there is a sale sign, but by revisiting your goals you may be able to muster the strength to walk away. Making a list of the things you need and shopping online to avoid getting carried away by the purchases of others you can stick to the plan and actually stay within your budget.
5. Check on Savings Accounts or Standing Orders
Finally, it is a good idea to make sure your standing orders are still going to the right accounts and they have not been redirected or simply stopped. It is better to stay on top of these things than to discover down the road that the money you thought you saved was actually spent because it never left your account.
It’s easy to get swept away by all the festivities but if you are not careful you could end up missing out on some great opportunities or making some bad financial decisions that will come back to haunt you in the new year. Take these precautions instead to help get your finances in shape for the year ahead.