Last Updated: January 1, 2011
If you’ve made a New Year’s resolution to get control of your finances in 2011, here’s a list of important planning and execution tasks that should be on your money calendar for the year:
- Set your credit report dates: You are entitled to one free credit report a year from each of the three credit reporting agencies: TransUnion, Experian and Equifax. Each year, you should check each of your credit reports from www.annualcreditreport.com. It’s wise to stagger the dates you check each report because irregularities might surface at different times of the year — just split them over the course of the year.
- Think about college aid: In the next month, high school seniors will start hearing about early admissions to the schools of their choice. Start reading up on the Free Application for Federal Student Aid (FAFSA) for the upcoming school year (2011/12).
- Start or review your emergency fund: Experts believe you should have three to six months worth of living expenses set aside. Set a fixed amount you’ll save each month toward that goal.
- Check your investment accounts on your brokerage firm’s or mutual fund companies’ websites and print off the Dec. 31 statements for the previous year: Review the earnings paid out to your account from interest, dividends, and both short-term and long-term capital gains. Use this information to begin organizing your 2010 taxes.
- Review your checking account statements and credit card statements for the previous year and tally your spending/expenses into categories: Compare your cash outflow to your cash inflow for each month of the previous year, and set target goals for spending in each category for the New Year based on your financial goals and values. If you want to make this process easier, consider buying a personal finance program for your computer.
- If possible, fund your Individual Retirement Account (IRA) contributions as soon as possible in the New Year: Theoretically, this allows you to compound your returns and the benefits of tax deferral over the longest period possible.
If you have a health savings account or a flexible spending plan through your employer before the end of the plan year, total the amount of expenses filed during the previous year and compare them to the total amount you contributed: Make sure you aren’t contributing more than you are being reimbursed, because these are “use it or lose it plans.”
Start pulling your tax information together: Your W2s and 1099s should be arriving — get your records ready to start your return.
Get ready to fund your IRAs: April 18 will be 2011’s tax deadline, and that’s the last date to make a 2010 tax-deductible contribution to your traditional and Roth IRAs. Plan to make the biggest affordable contribution you’re allowed.
- Tax deadline: April 18 is the deadline for postmarking federal and state taxes.
- Education account contribution deadline: Don’t forget that contributions to Coverdell accounts for the previous year are also due on tax day.
Check your insurance coverage: If you have sufficient emergency funds, check to see if a higher deductible on home, auto or health insurance makes sense in terms of premiums savings and fewer potential claims.
- Talk to your parents: If you’ve never discussed estate, health and long-term care planning with your parents, do it now.
Do a summer energy checkup: Have your air conditioner checked to make sure it’s working properly during the cooling season.
Do a mid-year financial checkup: Take the time to do a review of your tax planning, retirement savings, home, health and life insurance needs and do a mid-year check of your spending and emergency fund levels.
- Do a beneficiary check: Is the beneficiary information on all your investments, insurance policies and bank accounts up to date?
Check your will: If you haven’t checked your will in five years, see if your instructions are current. Make sure your powers of attorney reflect your intentions.
- Go over money issues with your college student: Whether they’re freshmen or seniors, take some time to go over how they’ll manage their money at school.
Consider whether your salary or benefits are on target with your industry: Every year, it makes sense to do an assessment of where you are in your career, both financially and professionally. This way, you can start thinking about compensation issues well ahead of calendar-year budgets.
- Order your last credit report: Get your third and final credit report of the year.
Do a winter energy checkup: Have your furnace checked to make sure it is working properly during the heating season.
- Be ready for open enrollment: Many companies set open enrollment for their benefits plans in September and October. Make sure you’ve done some thinking about your benefit choices for the coming year.
Tax extension deadline: If you had to file for an extension on your federal taxes this year, your final deadline to file is Oct. 17.
- Total your potential tax losses: Confer with your tax adviser to see if it makes sense to sell stocks before the end of the year to balance out capital gains or losses in your portfolio or to carry forward losses for future use. Plan mutual fund sales before dividend distributions for less tax impact.
Spend out your flexible savings account money: Check your employer’s rules, but you should spend out the amount you put in your flexible spending account by Dec. 31 or the end of the plan year. Schedule any procedures or medical expenses you’ll have by then.
- Give: Make the charitable deductions you want to make for the end of the tax year. Also, remember single taxpayers can make financial gifts of up to $13,000.
- Pay deductable expenses early: To lessen your tax impact for the current year, pay mortgage interest or property tax installments early if your tax situation would benefit from it. See if alternating using standard deduction one year and itemizing the next — called “doubling up” — works for you.