Out with the Old, In With the New (Pt. II)
Part II in our Two-Part, End-of-the-Year/ New Year’s Series on Getting Your Financial House in Order.
The new year is often viewed as a time to turn over a new leaf or make resolutions, well-intended as they may be.
If “getting your financial house in order” is one of yours, why not work with what you already have?
Here are a few tips:
#1. Follow your budget.
Hopefully, if you took our advice in December, you took a long hard look you at your finances and how you’re doing financially. Did you determine you’ve been living within your means or did you find areas that needed improvement?
If so, January is a good time to start anew. You can keep track of your monthly spending by sitting down with your bills and financial statements at the end of each month to review how much you spent in each category or another option is to keep a log of your expenses as you go.
#2. Start getting ready for your taxes.
You may not have received your W2s yet, but you can head off any paperwork headaches by starting the process of gathering all your receipts and tax documents and organizing them into one folder in advance of the April deadline.
If you have a Future Scholar account, the good news is, it’s not too late to make a contribution or open an account and still claim an exemption on your 2018 taxes! In fact, South Carolina’s Future Scholar 529 College Savings Plan is one of only a handful of states that gives account holders until the April deadline to claim an exemption.
#3. Get out of debt.
Thanks to mortgage, auto and credit card debt, Americans now have more debt than they ever have before, according to the Federal Reserve Bank of New York’s Center for Microeconomic Data.
If you have substantial debt, why not make a plan to start paying it off this year? A variety of “payoff calculators” are available online to help you crunch the numbers and give you an idea of how much you can reasonably afford to pay each month.
It may be difficult or seem impossible at first, but the more you chip away at your debt, the more momentum you’ll build. And the sooner you can get out of debt, the faster you can reach other financial goals.
#4. Set a goal to increase your savings.
Once you have your debt under control, you can begin increasing your savings. Being able to save is the key to financial security and can also help reach other financial goals faster such as saving for retirement or your child’s college education, as we’ve mentioned before.
One strategy for building your savings is to make it automatic by setting up a regular monthly deposit or transfer – either from your paycheck or checking account that then goes straight into your savings account.
#5. Open a Future Scholar 529 College Savings Plan.
The new year is the perfect time to begin thinking of your children or your grandchildren’s college education, if you haven’t already.
With a Future Scholar 529 College Savings Plan for example, any contributions you make to your account are tax-free. Withdrawals are also tax-free as long as the money is used for qualified expenses and, if you file an S.C. tax return, you may be eligible for additional tax benefits!