As the start of fall begins we draw near to the end of another year. Soon the holidays will be here and we will be writing out our list of resolutions for the New Year. Although we may be winding down 2014, it is not too late, or even too early, to start making changes in our financial habits for the benefit of the months and years ahead.
Tax Considerations
We have just entered the fourth quarter of the tax season, which means tax return filings are just around the corner. Now is the time to start organizing your documents and receipts for tax preparation time. Having your paycheck stubs and proof of expenses that can be deducted from your tax liability is the best way to ensure you pay only what you owe or, if you're lucky, get a nice return check.
Did you get married? Relocate for a job? Have a child? Drive a lot of miles for your job? Pay interest on student loans? or even suffer an injury or illness that cost you thousands out of pocket? All of these, and more, are deductions that could significantly lower your tax liability. Make sure to have proof of these expenditures to show your tax professional.
Open Enrollment
For many companies, the fourth quarter is a common time for open enrollment season for health insurance and retirement funds. If you are employed by a company that offers benefits it is important to watch for these particular events each year. After the launch of the Affordable Healthcare Act, many people found themselves with better, but also much more expensive, healthcare plans. Open enrollment is the perfect time to make changes to your elective healthcare coverage and retirement benefits at no penalty. Most often, these types of changes aren't allowed or at least not without a penalty outside of open enrollment. Check with your employer this fourth quarter to see if you can lower your healthcare costs and increase your retirement contributions to put you on a stronger foot for 2015.
Holiday Spending
While most people tend to wait last minute for holiday shopping, the truth is that two-thirds of Americans overspend on holiday purchases. Between buying more than necessary and the excessive use of credit cards to fund these purchases, the holiday season can bring as much financial bloat to your accounts as does all the delicious food does to your waistline.
Start planning now for this holiday season by developing a plan for your gift list. Know who you are buying for and how much you can afford to spend before hitting the shopping malls. Cut back on other expenses for the next two months and put that savings into a holiday fund. Don't start the New Year with more debt over one day's party worth of fun. Focus on family time and not what's wrapped under the tree.
Reese Baker is the owner and founder of Baker & Associates, one of the top bankruptcy firms in Houston. Baker & Associates aims to provide clients with a fresh start by eliminating debt, fighting foreclosure and repossession, and even help rebuild credit. As a Bryan/College Station bankruptcy attorney, Reese has had the opportunity to help people get out of debt and get on the path to financial freedom.
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