5 money moves to make before the new year

 Photo Credit:  William Iven

Photo Credit:  William Iven

Can you believe that in two weeks everyone will be toasting away 2015?  We will be moving on to the year  I turn 30 (it’s the new 20, right?), my brother gets married, and I finally (fingers crossed) remodel my kitchen.  Maybe. 

However, before we kick 2015 to the curb once and for all, there are a few things you need to think about in order to get all of your financial ducks in a row.  I know, not at the top of your to do list right now.  BUT you don’t want to get into 2016 and wish you hadn’t been so focused on finding the perfect ugly Xmas sweater and figuring out your NYE plans that you forgot to get yourself set to have a kick ass 2016.  I don’t want that for you either.  So take a couple minutes to dot your i’s and cross your t’s.  Your 2016 self will thank you.

  1. Health Insurance

    For those of you with flexible spending accounts (FSA):  Make sure you spend that dough.  These operate under a “use it or lose it” policy, so if you don’t start scheduling those doctor appointments or stockpiling your contact lenses, you may forfeit a good chunk of the money sitting in your FSA.  The good news? While you used to lose EVERYTHING sitting in your account at year-end, the health insurance gods decided to show mercy and now allow you to rollover $500 into the next calendar year.  So if your balance is less than that threshold, no need to fret – you’ll have that money available to you next year (just check with your HR department to ensure you don’t have to elect to roll this over).

    For those of you with health spending accounts (HSA):  Luckily, your balance rolls over from year to year, so you have little to worry about.  However, note that you can only contribute $3,350 ($6,650 for a family plan) per year towards these, so if you want to hit the maximum, you must contribute this amount by the time you file your tax return for 2015 (AKA by April 15, 2016).  Make it easy on yourself and just do it by December 31st – then you don’t have to worry about having the cash in 2016 for both 2015 AND 2016 contributions.  We don’t want to stretch ourselves too thin, people.

  2. Retirement Savings

    Surprise! There are limits on these, too.  If you’re trying to kick yourself into retirement saving high gear, then know that you can contribute up to $5,500 to a traditional or Roth IRA and $18,000 (big roller – I’m not even there yet) to your 401(k) per year

    All contributions you make to your 401(k) must be made by December 31st, so if you have some extra cash you want to throw at it, make sure you get with your HR department and get this done pre-NYE.  Contributions to traditional and Roth IRAs can be added up until you file your tax return for that tax year (i.e.  for 2015 the deadline is April 15, 2016), but again, I suggest that you do this all before the end of the year so you don’t have to come up with the money next year to fund two years’ worth of IRA contributions.  No one wants that responsibility.

  3. College Savings

    This one is for all you Hoosiers out there.  There’s no annual contribution limit or deadline for 529 plans, but there is a 20% tax credit you can receive on your Indiana tax return for contributions to these plans.  So if you contribute $500 by year end, you’ll get $100 taken off the amount you owe (or, even better, get $100 added to your refund). 

    This is for anyone who contributes to a 529, not just the parents; thus, if you’re racking your brain trying to figure out what Xmas gift to get your niece, nephew, or the little cousin who puts mashed potatoes in your hair when you aren’t looking, consider contributing to their 529. That $100 may help them buy their Marketing 101 book 15 years down the road and put $20 back in your pocket now.  And you won’t have to pay a heinous shipping charge on it (Christmas is less than 10 days away, folks).

  4. Itemized Deductions

    Brief review:  you either get to claim the standard deduction on your tax return ($6,300 for individuals in 2015, double that if you’re married) or itemized deductions (i.e. mortgage interest, state/local income taxes, charitable contributions, etc.) if they exceed the standard deduction.

    So here’s the thing:  if you are already past that $6,300 threshold and are feeling charitable, think about donating some money to your church or a local food bank.  You will be doing something good for your community AND lowering your taxable income, thereby lowering the amount you owe (or increasing your refund).  I mean it’s better for your dollars to go to the needy than the government, right?  Or you can just go buy a Hoverboard and not worry about taxes. Whatever.

  5. Grade Your2015

    Get out your red pen, ladies. In order for you to set yourself up for a SUPER 2016, you need to look at your failures in 2015.  It’s cool – we all have them.  In fact, I’ll be posting in a few weeks about mine.  However, you’ll never move past them if you don’t even recognize what they were.  So take the time to review your finances, find your holes, and develop a plan for patching them next year.  There’s nothing sexy about being irresponsible with money, so make sure you start 2016 on the right foot ;)

I won’t be posting again before Christmas, so I hope you all have a wonderful holiday with your friends and family – follow my Instagram (@itsbrittk) to see how I spend mine :)  Otherwise, stay tuned for my next post – I’ll be letting you in on my New Year’s resolutions and what country I’ll be heading to in the spring (my first big international trip)!

Merry Christmas xoxo

 Photo Credit: Matthew Brodeur

Photo Credit: Matthew Brodeur