Full disclosure: I wrote this post below in early December bringing you the best financial tips for next year and every year after that! This is my kind of filler post around here. I thought about starting a Weekly Summary or something but I didn’t. Hope you like. If not, it’s okay, go read another hideous mega plastic pump by a Titan blogger!
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Every year in December you’re bombarded with posts about tax planning for the end of the year. Most start out by advising you to accelerate income into December or postpone expenses to January (and vice versa) depending on the tax rates applicable to your financial situation.
I say let the end-of-year advice columnists fight for your attention. I’m not playing. In this column, I offer you advice that applies throughout all of next year. Here we go:
1. File your taxes early to avoid the unpleasant surprise of being notified that you already filed. When that happens it is usually because a scammer has stolen your Social Security number, filed electronically on your behalf, and likely already is long gone with a big tax refund leaving you to handle a huge mess. Start accumulating your tax documents now. Procrastination is for the other guy. You do not want tax identity theft to happen to you.
2. Make an effort to consolidate your financial accounts by closing at least two. You are not using them and you may be paying unnecessary fees. Besides, the mental real estate required to maintain them is likely not worth the effort. Focus more on activities that are more meaningful to you.
3. Vow to increase your contributions to your employer retirement plan by a minimum of 1%. Ideally, you should be maximizing your tax-deferred contributions. At the very least, aim to contribute enough to capture all of the matching funds from your employer.Do not say no to free money.
4. Get started on your estate planning in 2016 by making that call to schedule a meeting with an estate-planning attorney. It is not pleasant to talk about your own demise but you owe it to your loved ones to make sure everything is in order in case something happens to you. Avoidance is not a solution.
5. Are you enjoying the savings at the gas pump and in your natural-gas utility bills? Vow to add these savings to your emergency fund or a savings account for a specific short-term goal before you spend it all and then wonder where that money went.
6. We all know health care is expensive. A big component of retirement expenses will be health care-related, of course. There are many studies showing us the grim reality awaiting us. It is imperative to invest in your lifestyle today by buying that gym membership and actually begin using it. If you are not as motivated, perhaps hiring a personal trainer may be what you need to do to get you back to working on your health. You hear the mantra “Health is the most important thing” for a reason…it is true!
7. Since we are on a procrastination theme (see #1 and #4), how about actually making it a priority to take that trip you have been talking about for years? We are not getting any younger so find that time to travel because who knows if you will be around or able to take that trip in the future? I am sure you can squeeze one trip in next year. Use your frequent-flier miles if you have any lying around. They only continue to get devalued as time goes by.
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Regarding #6… yes, get to the gym. Motivation dies, habits win the day/week/month/year(s). BJ Fogg has a book (Tiny Habits) and TED talk (if you want an overview) that get into the science behind habits. I think it applies to more than just physical fitness, including financial decisions. Start small and grow.
I started big at TBB and now look at me barely scraping enough to post daily…
Just kidding. You make excellent points!
Thanks SH.
Thanks Buzz, for continuing to blog when so many have fallen by the wayside.
Off to work now.
One day I will join them!
The NYT article about Alan Kurdi’s family Is heart-breaking but poorly-edited.
http://www.nytimes.com/2015/12/28/world/middleeast/syria-refugees-alan-aylan-kurdi.html
For example, the following paragraph has unclear referents:
“They had six children. They remember living modest lives not much affected by tensions between the government and Kurds. They spent the summers harvesting olives in Kobani, but saw themselves as city kids. Most left school after ninth grade to learn the family’s barbering trade.”
This year I learned to donate ETFs to charities to avoid the capital gains tax and thereby give a larger donation. Gave to MSF and Oxfam and others, because there but for the grace of G-d go I.
I had that NYT by my door at the Dallas Fairmont this morning, nice article.
Nice move on the ETF donations! I donated a crap load of crap to Salvation Army this year…amazing how much crap can be accumulated. Having said that, I am at a big shopping mall in Dallas right now at a Starbucks while wife is roaming the shops oh oh 🙂
Buzz, good post (jawdropping actually)! I use TurboTax, do you think that it is the best option for do it yourselfers? Also, I was just notified by the Feds that my info was stolen by the Chinese in that HUGE Gov’t Data Breach a few months ago. Other than having my credit access frozen by the big 3, which we all should do, are there any tips besides filing early that you can recommend? I don’t want to fly all the way to China to kick some ass from someone who took my refund. I am taking Karate School lessons just in case but all the others students Mom’s keep complaining that I am too big to karate their kids. ありがとうございますありがとうございます ありがとうございます
Turbo Tax is fine for simple tax returns.
Not sure about if you are referring to an actual tax identity theft issue or just the general huge data hack earlier this year. If someone stole your SSN, filed on your behalf and already spent “your” tax refund, there is a certain process you must follow: paper return with an affidavit on top, copies of docs, etc and mailed to the IRS and then wait…wait…and wait some more for their “investigation”. At some point it will be confirmed as a tax identity theft and at some point you will receive a PIN you must attach to your 2015 personal tax return…It’s a clusterphuck, this is a huge growing problem, IRS can’t keep up, the scammers are out for blood and, guess what, they use a lot of these prepaid debit cards we use in The Hobby…no wonder the Wal Mart staff is looking at us like criminals hehe. If is due to the huge data hack, not much else to do other than what you stated, just file FAST in early 2016 if you can.
Good information here George. Thanks for taking the time to put it together. I thought number 6 was a good point in that you state correctly that by investing in a healthy lifestyle you’re also investing in your financial future.
A healthy lifestyle starts with eating less or “right”. Burning calories in a gym takes much more effort than controlling your cake hole. Overweight is a mental disorder (and easy access to cheap calories).
I agree 🙂
I recommend combining 7 and 6 by moving to Europe – permanently. Healthcare = sorted!
And miss the 100k signing bonus credit cards you guys miss in Europe? No way Jose 🙂
You posted an article a few days/weeks back written by Jonathan Clements on retirement (I believe). I decided to purchase his,”Money Guide 2016″ book. So far, I like what he has written. Good common sense and easy to understand. Keep the financial elements to this blog coming because I appreciate it. Thanks for highlighting those types of financial writers.
Thanks for buying it with my Amazon link and for the extra quarter. Each quarter counts. When everyone does that I will be able to buy out some of the Blogs To Ignore to improve humanity 🙂
The guy wrote at WSJ for many years. Then he left and went to…Citigroup…gulp! Recently left there as well and is slowly getting back to his true calling, writing about personal finance. He does have common sense and writes very well. I do not agree with some of his points and that’s okay. Personal finance pays the bills in my household, this TBB thingie is mostly for fun. Like making jokes about quarters lol.
Excellent tips!
I plan on doing a few of these next year (file early, save more, increase retirement contributions). 2015 was the first year I maxed out my Roth IRA. In 2016, I plan on doing it again – and maxing out my 401(k). That’ll be HUGE progress!
Funny you’re in Dallas now – I’ll be there next week. Safe travels and thanks for all!
-H.
why stock up on apple cider vinegar and charcoal filters on jet.com? health benefits?