2011 Countdown

 Hard to believe but the end of the year is almost here!  10 planning tips to make the best of December: 

  1. Review your credit history- At AnnualCreditReport.com you can get a free copy of your credit history – everything the three major reporting agencies have in your file. Your credit history doesn’t include your credit score, but this is the information used to tabulate your score, so you really need to check it for accuracy. Take 10 minutes to download it, then a half-hour looking it over to make sure all’s well.
  2. Clear clutter- There’s no better time than the holidays to turn your clutter into cash, or at least a tax deduction. The best way to approach your closets, attic, basement, or storage rooms is slowly – otherwise it’s too overwhelming. Pick one room, closet, or drawer per day, and spend a few minutes getting rid of stuff you haven’t touched in a year or more. If it’s easily sold find an online source for which to sell. If you’d rather help someone less fortunate, donate it. Either way, you’ll end up with more money, more deductions, less mess – and if you’re lucky, maybe even a re-gift.
  3. Review/rebalance investments- Investments like your retirement plan shouldn’t require a lot of maintenance, but they do require some. Take a look at how your investments are performing contact your financial advisor and decide whether it’s time to rebalance, buy, sell, or stay status quo.
  4. Support a charity- It’s the season for giving, not just because of good cheer, but also because of tax-deductible donations.
  5. Maximize your retirement contributions- The annual cap for IRAs (including Roth’s) is $5,000 for those under 50 and $6,000 for those older. You have until April 2012 to do this, but not so with your 401(k). You only have until Dec. 31 to contribute the max: $16,500 if you’re under 50 and $22,000 if you’re over 50.
  6. Spend your Flexible Spending Account (FSA) – If you’ve set aside money in a flexible spending account, it’s gone after Dec. 31. Some changes were made this year to how an FSA can be used. For example, most non-prescription drugs no longer qualify. Remember, use it or lose it.
  7. Prepay bills- You might boost some tax credits and deductions for this tax year by prepaying things like your mortgage or next semester’s college tuition. If these bills are due in the near term, get a deduction by paying in advance.
  8. Tinker with your budget- Now’s a good time to look at whether your spending has matched your projections over the past year – maybe some adjustments are in order, especially if your income or expenses have changed.
  9. Change important passwords- A lot of sensitive personal information is one smart guess away from being stolen. Add an extra layer of protection by changing the most important passwords at least once a year. A good password has a mix of numbers, letters, and special characters.
  10. Make a will-If you don’t have a plan for your demise, there’s no time like the present to start one. Lawyers can cost hundreds of dollars but do-it-yourself software is less than $50.  If you have the time and money, have your computer-generated will checked by a lawyer in the future.






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