Your financial New Year's resolutions may have already been made, but that doesn't mean you should stop thinking about what you want to achieve in 2018 and beyond. Are you thinking about buying a home soon? A car? Are you planning on giving your living room a makeover just in time for the Super Bowl?
If you have expensive items on your list for this year, don't panic – budgeting and savings tools can help alleviate some of the stress that comes with making these bigger purchases.
RELATED: 6 tips for a financially successful 2018
6 tips for a financially successful 2018
6 tips for a financially successful 2018
Determine Debt Repayment Strategies
If you’re carrying credit card debt across multiple accounts, not only can it become increasingly hard to manage, but you’re actually spending money on interest. Instead, look at saving money on interest by exploring debt consolidation options such as a personal loan from Marcus by Goldman Sachs, an online lender which offers fixed-rate, no fee personal loans to consumers with good credit (660+). For instance, for those consumers with good credit carrying $10,000 in credit card debt, when compared to a high interest credit card, you could potentially save just under $1,500 by consolidating with a 48-month loan. Consumers should check out the calculator at Marcus.com, tolearn more. Plus, a single payment at the same time every month is easier to manage vs. dealing with multiple accounts that are due at different times. Clearing up this credit card debt in advance of the holidays will get you into the spirit of saving and help avoid digging yourself deeper in debt.
Review FSA / HAS balances
If you contribute to a flexible spending account (FSA) to pay for copayments, deductibles, some drugs, and other health care costs, review your balance before year end as any unused funds could be lost when 2017 comes to a close. Check with HR department to confirm when the deadline is for you to access these funds as employers can offer a grace period through March 15, 2018 or allow you to roll over a percentage. If your employer doesn’t provide a grace period or allow a roll over, look for ways to draw down the account. Make doctor appointments such as wellness exams, vision exams, dental checkups, teeth whitening and buy allowable medical items before year end so you don’t lose the money! When it comes to a health savings account (HSA), year-end isn’t as sensitive. You won’t lose the money contributed to this account. It will always be available to you and will roll over from year to year. However, if you find that you have more money in the account than you need, you may consider making lower contributions as your money could be going toward other financial goals like retirement savings.
Lower taxable income via charitable donations
Spend some time before the end of the year to look for ways to reduce your taxable income to save on taxes come filing deadline in April 17, 2018. Consider boosting or maxing out retirement contributions and enjoy doing something good by giving to a charity. The holidays are the perfect time to find plenty of opportunities to donate!
Automate savings and rebalance your budget
You can’t set up a realistic budget if you have no idea how much you spend each month. Identify your budget baseline by tracking spending for a few months so you know how much goes toward needs and wants. Through this process, you will be able to identify areas where you typically overspend. Begin by making small changes that are easier to stick to instead of trying to commit to a complete overhaul which could lead to budgeting burn out. You should also consider paying yourself first and automating your savings so you stay on track to meet your goals. Keep in mind, what’s out of site is out of mind and you’ll learn to live on less when those savings are automatically deposited into a separate account.
If you think you’re withholding too much or too little on your W2, you have time to make adjustments. Check out the IRS website to find a withholding calculator for help determining how much to withhold or consult with a tax accountant now.
Set Financial Goals Now
Don’t wait until the new year to identify areas of improvement and set financial goals. The sooner you establish your various financial goals, the sooner you can begin making steps toward reaching them and paving the way toward a healthier financial future. Determine a specific goal like spending less over the holidays or paying off your car loan. You must be specific in what your goal is, including a date by which you want to reach this financial milestone. Identify concrete steps you need to make to get to those goals and outline a plan.
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We know big goals can often carry big price tags, so whether you're planning to buy a home or treat yourself to a much-needed vacation, here is some advice on how to approach those big-ticket buys.
Plan, plan, plan: Your resolutions may have already been set, but looking at your financial goals each year should become more of a monthly (or weekly) habit than a resolution. If you're looking to book a big vacation this year, plan it months ahead, so you can track flights and hotel rates and get the best deal possible before prices jump.
The same goes for any big expenses – if you can give yourself enough time to prepare (sometimes even years if it's a house or a car), the burden and stress won't feel as heavy. Decide now what your goals are and what you want to budget each month, then start stashing away that amount from each paycheck. Putting it in a separate account that you don't touch often can help you resist the temptation to dip into your savings throughout the year.
Sleuth the sales: When purchasing expensive items, it's important to look around for the best deal. There's almost always a way to avoid paying full price, especially when it comes to booking a resort stay, or buying furniture and home appliances. Markups are typically high, and you shouldn't pay full price. Of course, there are exceptions to the rule, but you'll want to do your due diligence and research what else is out there before you purchase.
It also goes a long way to study the best times to buy certain products, such as mattress sales on Memorial Day and furniture deals in July, and always check for a coupon. If you don't see a price you like, try negotiating or wait for something better to come along.
Get creative with savings: While one big savings account is important, if you really want to focus on saving for a house or car, start a savings account specifically for that purchase. It can help to separate your savings, so you can have a clear picture of where you stand.
Another way to stick to your savings is to automate them. Plan to have the money you want to save automatically deducted from your paycheck or checking account each month.
Use credit for good: Use your credit card responsibly, not only to build your credit, but to earn rewards on purchases. This isn't the best strategy for everyone, especially for those already in debt. But if you're able to pay off credit cards in full each month, using rewards cards can be a great way to save for a vacation or get cash back. With travel rewards credit cards, you can earn miles or points to redeem for the vacation you've been dying to book, and other cards can be redeemed for points toward gift cards to help purchase a new computer for the family, or a washer or dryer. Keep in mind that you don't want to open too many cards at once, and you need to make sure to use them responsibly for this strategy to work in your favor.
Making big purchases is possible. Check in with your goals and be realistic with your timing. Setting a reasonable deadline is important, so you feel like these major purchases are within reach. Big-ticket buys can be scary to tackle, but with some planning, dedication and research, these purchases can be all the fun you hoped for and more.