What to do before December 31?

What to do before December 31? 150 150 ML Cloud Accounting

What to do before December 31

It’s the end of the year, and amid all the celebrating and best-of lists, it’s time to get in a few smart financial moves before the new year begins. Consider the following suggestions to end your year in a financially strong position, setting yourself up for success in the New Year.

One of the easiest things you can do is maximize your end-of-year retirement contributions. Even if you increase your RRSP contributions by just a percentage point or two, the extra contribution may add up in the long run. You may not even notice the difference in your income. Here is a relatively nice calculator to show how much your tax savings could be with an RRSP contribution. http://ativa.com/rrsp-tax-savings-calculator/

Donate to charity. Speaking of charity, any contributions you make to charity before year-end can be deductible against your income. You can make gifts with cash or property, including appreciated investments. If you want to see how it can benefit you, use this calculator: http://www.cra-arc.gc.ca/chrts-gvng/dnrs/svngs/clmng1b2-eng.html

Pay off debts:  If you have credit card debt or student loans, funnel most of your bonus money towards paying off debts. If you are debt free, congratulations! That means you can consider opening a Tax Free Savings Account or CD and allow the money to grow.

Take some time to analyze your investments and revisit your allocations. Rebalance your investments, especially if you haven’t done so since last year. There are free, automated investment trackers that can be found online, or you can use a computer or hard copy spreadsheet.

Take advantage of programs that you participate in which have year-end due dates: 

• If your company has a “use it or lose it” vacation plan, take any unused vacation days pronto or ask for an extension. 

• Check if you have any frequent flier or rewards points expiring at the end of the year. If you do, redeem them. Check out www.points.com to consolidate points from different reward programs.

• If you have a Medical Reimbursement Plan or Flexible Spending Account, use any remaining funds if they expire at the end of the year.  If you have no reason to visit your doctor, check your plan for an approved list of covered items that you may be able to purchase, such as glasses, a knee brace, or a humidifier.

• If you are retired and have a retirement plan that requires you to withdraw a certain amount each year, make sure you’ve done so.

Lastly, compare where you are now to where you planned to be when you mapped out your finances for the year back in January. Have you met or at least made tangible progress towards your goals? Were your goals too lofty, and should you consider adjusting and scaling back in the coming year? Making realistic plans is one of the best things you can do for yourself and your finances for the coming year.