7 year-end financial tasks to get in a better financial position - Western Mass News - WGGB/WSHM

7 year-end financial tasks to get in a better financial position

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By Andrew Housser

While the holiday season can bring fun and merriment, it also can be one of the costliest seasons of the year. Before celebrations hit full stride, give yourself the gift of a year-end financial assessment. Take these seven steps to help ensure that your new year is happy, healthy and debt-free.

Evaluate your spending and expenses. Use Quicken or other financial software, or add up receipts by hand. How much are you really spending on your home, car, dining out, clothing and entertainment? Where can you convert an expense into a payment on a debt, or a contribution to savings? Look at spending on Internet, cable and streaming entertainment, gym memberships, mobile phone service and apps, security system, music or audiobooks, and grocery delivery. Then cancel any services you no longer use regularly. Can you find an alternative, such as free books from the library, a local rec center or an inexpensive video-on-demand service?

Organize. As you sort paperwork, ask yourself if your financial organization system is working. Arrange to receive most bills electronically. Set electronic reminders for future payments, or put monthly bills, such as phone, utility and rent or mortgage, on automatic payment so you cannot forget. Are you on course to reach your long-term goals? Talk with your partner or family about the goals, and how you can work together to reach them.

Pay down debt. If you carry credit card debt, personal loan debt or medical debt, consider dedicating any extra funds or end-of-year bonus to making extra payments. As you are looking at your annual budget, can you increase your payments to eliminate debt faster?

Maximize FSA, HSA and retirement benefits. Now is the time to save (in an HSA or retirement plan) or spend (with an FSA plan) before year-end. Flexible spending account (FSA) plans let qualifying taxpayers use pre-tax dollars for medical and/or dependent care. You may lose any remaining funds over $500 in your account after Dec. 31. Check your balance and submit FSA-qualifying expenses. Health savings accounts (HSAs) let you deposit money tax-free and withdraw the funds tax-free to pay for medical costs. HSA contribution limits in 2017 are $3,400 for individuals or $6,750 for a family. People aged 55 and older can save $1,000 more. Retirement plans usually have a more flexible deadline, with people able to contribute for this tax year up until April 15 of next year.

Review health and property insurance. Open enrollment for health insurance is ongoing through Dec. 15 for 2018 coverage. If you are having trouble choosing or affording a plan, talk with your health plan’s customer service rep, or an insurance broker, ASAP. Help may still be available for qualifying individuals. While you are at it, consider checking the rates of your home and auto insurance coverage. Request quotes from a few companies to find out if you can pay a lower premium or improve your policy. 

Check your credit reports. Everyone should review their credit reports annually – and federal law requires that each person can obtain one free report each year from each of the three credit reporting bureaus. For yours, visit www.annualcreditreport.com. Review all personal information, and all listed accounts for accuracy. If you find errors, follow the credit bureau’s directions to report the errors for verification.

Get debt help if you need it. Be honest with yourself about your financial picture. Add up the total amount you owe on all of your credit cards, and look into the cause of the debt. Did you have a one-time emergency that you are paying off diligently? Or is ongoing overspending the reason you owe? Are you living beyond your means, or are you truly unable to keep up? If you are struggling with debt, look into options for debt help. The American Fair Credit Council (AFCC) is a reliable, objective organization to identify reputable debt relief providers.

Most people do not look forward to dealing with their finances – yet a well-organized financial plan can bring great peace of mind. Before the end of 2017 passes you by, work to put yourself in a healthier financial position for the coming year.

Andrew Housser is co-founder and CEO of Freedom Financial Network. The family of companies, providing innovative solutions that empower people to live healthier financial lives, includes Freedom Debt Relief and Bills.com. Housser holds a Master of Business Administration degree from Stanford University’s Graduate School of Business, and a Bachelor of Arts degree from Dartmouth College.
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