As we approach 2016, there are a few money mistakes you want to avoid in order to start the new year off right and with more cash in your pocket!
Procrastinating a few important decisions at the end of the year could end up costing you big money in 2016. So to help you avoid that, here are some ways to get your finances in order before January 1.
5 year-end money tips
1. Spend your remaining FSA dollars
Do you still have money left in your Flexible Spending Arrangement (or Flexible Spending Account/FSA)? If you overestimated your medical expenses for 2015, you might lose those funds under the use-it-or-lose-it rule if you don’t spend it all by the end of the year.
One option for using up your remaining dollars is to check out FSAstore.com, which offers a variety of ways to spend that money before the deadline — including all kinds of eligible necessities.
For more ideas, check out these 9 ways to spend any remaining FSA dollars.
2. Prepare your taxes
There are a variety of benefits to starting your taxes now — and one important thing you don’t want to forget is to get all of your deductions in order.
Before the end of the year, increase itemized deductions, including charitable contributions, business expenditures, and qualified medical expenses.
3. Check bank and credit card statements
If your credit card statement is a little crowded after the holidays, it’s a good idea to check your accounts for any potential fraudulent activity. The end of the year is prime time for scammers, and if you aren’t checking every expense on your bill, you could miss a fraudulent charge — and that’s not a good way to start out the new year!
4. Set budget and savings goals
Since New Year’s resolutions tend to flop by the end of January each year, goal setting is a much better option!
Setting goals is a habit for people who win with money, and it should become a habit for you too. Studies have shown that just by having a goal for something it brings you closer to that goal versus not having any goal at all.
Here are 16 ways to save more in 2016.
5. Prepare to max out at least one retirement account in 2016
If you don’t set a goal, it becomes much more difficult to find the money to save throughout the year.
So make it a goal to contribute the maximum to one type of retirement account this year. The IRS changed the contribution limits for 2015 on some accounts, but the limits will remain the same in 2016 on of the most common places to stash retirement cash:
- You can contribute $18,000 to 401(k)s in 2016
- You can contribute $5,500 to a traditional IRA or a Roth IRA (or $6,500 if you’re 50 or older) in 2016
If you don’t have any of these accounts, consider opening a traditional or Roth IRA. You need to contribute about $459 per month to max out an IRA next year. There’s more on how to do this in Clark’s investment guide.
Read more: 7 ways to revamp your finances in 2016