Personal Finance Calendar - Fourth Quarter
Managing your personal finances is an ongoing process that requires discipline.� Most people are successful at making sure the bills get paid and often saving a little on a regular basis.� However, managing your finances effectively is more than just handling the daily or monthly tasks.� Here is a monthly calendar for October through December that can serve as a guide to addressing some of these other issues.�
Review your charitable deductions for the year.�
- Americans continue to be generous givers to their favorite causes.� Contributions can provide personal satisfaction and tax savings.
- If you itemize your tax deductions, you can deduct cash contributions up to 50% of your adjusted gross income.
- Consider giving appreciated stock that you have held for more than a year if you wish to make a large contribution to your favorite cause.
If you are self-employed, make sure your retirement plan is up to date and fits your needs.
- The simplest retirement planning tool is an IRA.� You can contribute up to $5,500 for 2014 or up to $6,500 if you are age 50 or above.
- SEP IRAs are simple to establish and allow contributions up to 25% of compensation with a maximum or $52,000 for 2014.
Review the details of your employer's retirement plan and make sure you are taking full advantage of it.
- Participate in the plan. �Even minimal participation makes sense.
- Contribute as much as you can. The annual limit for employee contributions for 2014 is $17,500 with an additional $5,500 allowed if you are age 50 or older. Determine what you can afford and make the largest contribution you can.
- Get the entire employer's match. �Review your plan to understand how the employer's contributions are made and allocated. �Discussions with your human resources department may be helpful.
- Use a sensible investment strategy. Choose a combination of investment options that match your time horizon and risk tolerance. Generally, longer time horizons and greater risk tolerance point to a more aggressive investment strategy with greater use of equity investment choices.
Review any insurance offered by your employer to make sure you have made choices appropriate for your situation.
- Everyone should have health insurance and getting it through you employer is probably cheaper than buying it on your own.
- The choice of health insurance options should be based on how you want to use the insurance and how much you can afford.� If you view insurance as simply protection against very large medical expenses, choosing a higher deductible will probably result in lower premium.
- Many employers offer short-term and long-term disability insurance coverage.� Again, because this insurance is available as part of a group, the costs are usually lower than what you would spend on your own.
Discuss your finances with your family.�
- Many find it difficult to discuss financial issues with family members, but there are benefits for everyone by doing so.
- Preparing for a family financial discussion will force you to organize your thinking about your short term and long term financial plans.
- Keeping family members informed can reduce stress and anxiety if something unfortunate happens.
- You may learn something from them in the discussion.
Review your investment portfolio and your investment results for the year.�
- Be sure your asset allocation (equities, fixed income and cash) matches your time horizon and risk tolerance.� Longer time horizons and greater risk tolerance usually point toward a higher allocation to equities.
- Many investors end up with a portfolio consisting of many stocks.� Use this opportunity to review each position to make sure you still want to own it.
- If your long term investment results are poor, consider alternative avenues like mutual funds, index funds or changing your advisor.
- If you have realized capital gains and unrealized capital losses, consider selling stocks held at a loss to offset earlier gains.
Spend a little time reflecting on your financial situation and your goals.
- Evaluate how well you are doing in reaching your goals.
- Create your financial resolutions for the next year and write them down.
The suggestions on this calendar may not match your personal financial schedule.� However it can serve as a reminder to make sure you address important issues.