We are halfway into December which means your list of holiday to-dos and celebrations are probably in full swing. It may be the last thing on your mind, but it’s important to remain mindful of your financial plan as we close out the year, and to also look ahead to 2020. Here are a few tips to keep you on track through the rest of the holidays, while still allowing yourself room for some festive fun.
1. Max Out Your Benefits At Work
You still have time to adjust your 401k contribution and put in enough to take advantage of a company match. Use your PTO and take time off. Most PTO days can’t roll over into next year or be paid out. If you have a Flexible Spending Account use it before you lose it, 12/31.
2. Save Your Year End Bonus
If you are expecting a year end bonus or commission check, stick to the 90/10 rule. Put 90% of your check towards your financial goals (payoff debt, retirement, college fund, etc.). While it’s tempting to purchase that new car or go on shopping spree, consider your financial priorities before making any major decisions. Splurge selectively and enjoy 10% for yourself.
3. Control Holiday Shopping Sprees
Your hard earned money might be burning a hole in your pocket during this jolly time. According to a study performed by the American Research Group, Inc., the average American spends $882 on Christmas presents. Most of this is put on a credit card vs. cash. Be practical with your spending. If you don’t have your retirement plan funded, credit card debt under control or emergency account fully funded, think twice about overdoing it. And maybe your friends and family are in the same spot? It could be worth exploring putting limits on gifts, doing a white elephant exchange, giving back to the community or and/or just enjoying each other’s company instead of traditional gifting (which often leads to overspending!). Who knows, maybe you start a new tradition that is less costly, but just as much fun!
4. Charitable Giving
Tis the season to give to charity, so whether you’re a once per year kind of person or there’s a cause you give to consistently, get your donations in by the end of the year. If you hit the 12/31 deadline, you may be able to deduct those donations on your 2019 taxes.
5. Set Your 2020 Personal and Financial Goals
Set aside a some time and write out your goals. I do this annually and it’s done wonders for my personal and business life. Your goals should be SMART Goals. SMART goals are specific, measurable, action-oriented, realistic and bound by a time limit. So instead of setting a vague goal to save more money, you should set specific goals that incorporate your financial plan to get there. Going through your finances at the end of the year gives you a good starting point to build those goals from. This will help you stay focused as you kick off a brand new year.