During the holiday season we tend to spend a lot of time and money on gifts for others. Here are six gifts you should commit to gifting to yourself before year-end — and they’ll even benefit those you love and care for as well.
The Gift of Wealth
While you don’t need to be spending a ton of time on your investment portfolio, it’s important to check in once or twice a year to take inventory, review and rebalance. What do you actually have and where? Are you happy with your investments? Is your allocation out of whack? Are you paying too much in fees? Start the year off with a portfolio you are happy with. It’s also important to check on your taxes. If you’re on the border of another tax bracket it’s even more important to look into possible credits and deductions. Can you repeat any from last year? Can you invest more into your retirement plan? Can you take a loss on a deductible investment? Have you been waiting to make a donation to your favorite charity organization? These are all great ways to decrease your tax dollars and build more wealth.
The Gift of Retirement
Our hard-earned money gets allocated to so many places – healthcare, taxes, bills, etc. Don’t forget to pay yourself first. If you don’t have a retirement / tax-advantaged account, start by setting one up either through your employer or through your brokerage company. As the year comes to an end, try to maximize your contributions. The annual cap for a 401 (k) is $18,000 if you’re under 50 and $24,000 if you’re older. The deadline for 2015 contributions is December 31. The annual cap for an IRA is $5,500 for those under 50 and $6,500 for those older and the deadline is April.By contributing to these types of accounts you are saving in taxes by decreasing your taxable income and better preparing yourself for retirement.
The Gift of Health
FSA or flexible spending allows for pre-tax dollars to be allocated to qualified medical expenses. You as the employee typically have to set up a predetermined amount to be deducted from each paycheck before January 1st, so if you haven’t already, set up your flexible spending account before year-end. In the past it’s been important to use all flex spending within the fiscal year due to the ‘use it or lose it’ rule.
The Gift of Time
Gift yourself more free time in 2016 by letting technology work for you. Most financial service bills, statements and payments can be automated so that you are always on time and don’t have to think about it. Many credit card companies will send an email copy of a bill to be reviewed before payments go out so you don’t have to worry about fraudulent charges. Often payments can be automated online or if you send out periodic checks, setup your bank to do it for you. Automate retirement contributions and a portion of every paycheck to go to savings. It’s much easier when smart financial decisions happen automatically rather than having to make the choice and use precious willpower to save each month.
The Gift of Protection
Are you protected? If you rent or own your apartment or house, make sure you have renters or home owner’s insurance to protect the assets where you live. Get separate policies for fine jewelry as they might not be covered under a basic plan. If you have dependents and contribute financially, it’s important to have life insurance. Protect you and your loved ones with the gift of protection.
The Gift of Clarity
Do you know what you want out of 2016? If not, it’s time to create your vision. What are your goals for the next year? What will you accomplish? What do you want to be different and in what areas of your life? Create a clear vision of what your ideal 2015 will look like and remind yourself often. Keep a copy of your vision by your bed, on your wall, or in your office and make sure to read it daily. Focus on the ‘why’ behind the changes you are making to keep you motivated and maximize your results.