Financial Housekeeping Tips for the end-of-the-year

December can be one of the busiest times of the year. Between decorating for the holidays, shopping for the kids, traveling to see the relatives and enjoying the festivities, this month can fly by like no other. Taking just a few minutes to make sure your financial house is in order before the year wraps up is time very well spent. Here are a few simple suggestions to help you prioritize your financial housekeeping over the next few weeks:

1. Review your Benefits. If your company holds "open enrollment" for benefits at this time of year, make sure you review all of the options available--as opposed to simply taking on the same choices as last year. This is especially important, if your spouse also receives benefits through an employer. That's because your situation or benefits may have changed over the year, and it may make more sense for you to switch coverage from one spouse's plan to the other's. And make sure that you take full advantage of pre-tax spending accounts, such as the ability to pay daycare and medical in pre-tax dollars! Pre-tax spending accounts are use-it or lose-it plans and many companies end their benefit plan year on December 31. Be sure to check with your plan provider.
   
2. Asset Allocation. Year-end is an ideal time to open up your 401k statement to examine how your individual funds have performed. We all know that the financial markets have been up and down quite a bit over the past couple of months, so don't be too surprised if your accounts aren't progressing the way you might have hoped. But rather than get discouraged or simply ignore your accounts, take the time now to meet with your financial advisor and discuss if you should re-allocate from the better performing sectors back to the under-performers. This concept is called "asset allocation" and has been around for several decades. Its value cannot be overstated. Most financial planners believe that proper asset allocation can be one of the most important factors in your overall return. So take this year-end opportunity to review your plans with your financial planner to see what, if any, adjustments you should make.
   
3. Automate your New Years Resolution. Many people make financial resolutions to save more or pay down debt. In today's economy, it's a safe bet more consumers than ever will be making those kinds of resolutions. The good news is that with online banking, it's never been easier to keep that resolution. Simply hop online to your financial institution's website. Chances are, with a few clicks of the mouse, you can establish an automated savings account that allows you to send a certain amount of money to a savings account on a regular basis. Most online banking websites also allow you to easily set up automatic payments to a loan or credit card. Automating your financial decisions dramatically increases the likelihood that you will follow through on your plan
   
4. Ask Santa for a Budgeting Program. These days, we all seem to be on some kind of a budget. The problem is, most of us have trouble calculating where we're spending too much or even where all the money goes each month. That's where a budgeting program can come in handy... and this holiday season may be the best time to ask for one. Granted, opening a copy of Money or Quicken for your holiday present is probably not what you dreamed about as a child, but these types of budgeting and household finance programs may be the best gift you will receive this year. With a couple of hours work, you can download your various balances and accounts directly into these programs, and set them up to automatically update on a daily or weekly basis. Once you have a few months of transactions in these programs, they can quickly provide you a summary of what your real budget actually looks like. The results may surprise you!
   
5. Analyze your Debt. Make sure you know what rates you are paying on all your outstanding debts. If you have trouble figuring this information out, just give me a call or send me an email. I can help you determine what rates are being paid and if your current overall debt structure makes sense. Working together, we may be able to make changes that will put more money in your wallet or help you achieve other important financial goals.
   
6. Give. December is prime time for giving to charities, for both tax reasons as well as holiday spirit. For example, Toys for Tots is a great program that helps deliver toys to children for the holidays. Or, you can give to a local food shelf or soup kitchen that helps prepare meals for those who would not otherwise enjoy the holidays. Giving will put a glow in your heart this holiday season...and a glow in your wallet come mid-April.

By following these suggestions, you'll be better prepared for a happy New Year in 2009! If you have any questions about specific steps or need some help, please call or email any time. Have a great holiday season!