Summer is winding down — even though around here it’s warmer today than it was for most of July — and the kids are back in school. In this short video I share with you a few tips on actions you can start now to keep your finances on track for the balance of 2014.
1. Open Enrollment season for many employers will start soon.
Do you really understand the employee benefits you have? Now is a great time to understand how you are covered and how you should be covered. This way when the enrollment season starts you’re prepared to ask the right questions and ensure you are making the best use of the benefits available to you. Benefits change and your life circumstances change. What worked 2 years ago may not make sense today. Start investigating now so when the enrollment season opens up you aren’t waiting until the last minute to make rushed decisions.
2. Plan now for your holiday season spending.
The holiday season will be here before you know it. Halloween decorations are already up in the stores and I’m sure turkey and pilgrims will be on display soon. Now is the time to start planning your holiday budget. Yes the “B” word is being used here. Many of you know I don’t like people getting bogged down in budgeting details if they are living within their means, have no debt and are paying themselves first for future savings and investments. That said, I think it can be useful for even the most disciplined folks to outline their spending limits for the holiday season. This is extra important for couples to communication and agree on. Base on the problem areas that I often see, the top areas to focus on are:
- Holiday Travel
- Holiday Gifts (to friends, family and charities)
- Holiday Entertaining
Hopefully you have funds earmarked already for your holiday expenses but if not, get started today. Set realistic limits so you are not tempted to carry expenses long term on credit cards and start or continue saving so you can pay off the bills in full when they come in.
3. Yes, I said get ready for tax season.
You probably think I’m over reacting to have you start preparing for tax season but this is a perfect time to run an estimate (making some assumptions for the balance of the year, of course) on where your tax bill may be versus the amount you will have had withheld.
While many people like a tax refund and granted that money in the bank today would not generate a large amount of interest, it still does not make sense to give the government a free loan of your money. This is especially true if you are scrimping or borrowing to make ends meet only to obtain a large refund in April. That’s poor cash flow and tax planning.
On the flip side, I’m sure you don’t want to end up owing a large sum either. This is why it’s useful to start looking at this soon. It will take you a while to pull your year to date information together anyway so start now and by the end of the month you can run the numbers. I
n the video I recommend trying some of the online calculators.
Here is a link to the page that I mentioned on the video: SpeakOfMoney.com/TaxPlanning
As I mentioned, be careful with the online calculators if you don’t know what you are doing. If your taxes are more complex or you feel overwhelmed, talk with your tax preparer, CPA or financial planner to run the estimates for you.