Three End-of-Year Financial Clean-Ups
Tuesday, December 29th, 2009
What resolutions will you make this January 1? Year after year, Americans vow to exercise more, eat better, quit smoking—clearly we’re a nation concerned with our physical health. But what about your fiscal health? Here are three things you can do to strengthen your family’s finances and get fiscally fit!
- Look over your insurance policies; tell provider(s) about changes.
Saving money is great, but not if you have to skimp on coverage. If you’ve had changes in your life over the past year, now’s a good time to reevaluate your insurance needs. If a child passes a certain age limit (usually between 20-24), he or she may have to be removed from your health insurance policy, which could lower your rate. Did you sell or buy a car? One car more or less can impact your auto insurance costs. Did you quit smoking? That may also bring your health insurance rates down. Have you added a new member to your family? If you haven’t had a dependent before, now may be the time to look into life insurance. Talk to your insurance company about changes that may have an effect on your rates and also about packaging several policies (auto, life, home, renter’s) for better rates on all. If your employer offers it, a flexible spending account (FSA) or health savings account (HSA) can also save you money. With these accounts, you determine an amount from each paycheck to be set aside to cover health costs such as co pays, prescriptions, even over-the-counter medications. The deductions come from your paycheck on a pre-tax basis, saving you from paying taxes on that money. HSAs even accumulate tax-free interest! The only drawback: with an FSA, you have to spend the total amount before the end of your company’s benefit year, or the money is gone forever. - Make sure your savings are earning.
Money sitting in a savings account is a little like a teenager on the couch—lots of potential, but not much happening at present! If you have savings, now may be a good time to consider if your money is doing all it can for you. Money market accounts, certificates, IRAs: all of these products make your money work harder by earning more interest.If you need to stay flexible and liquid, short-term certificates are a great way to earn without tying up your money for long periods. Money market accounts allow you even greater access to your money while still earning interest higher than a traditional savings. If liquidity isn’t your primary concern, longer-term certificates get higher rates of return. Consider also that GHCU’s 12- and 24-month certificates come with a free one-time bump. If GHCU’s rates go up during the term of your certificate, you can bump up the rate of your existing certificate (for the remainder of the term) to match.If you’re looking ahead to retirement, a Roth IRA can help you build equity and avoid tax when you start withdrawing your money. On the other hand, investing in a traditional IRA now can help you reduce your tax burden for 2009. - Do or redo the family budget.
Planning out your budget is a bit like going to the gym—not much fun while you’re doing it, but you’ll feel great when it’s over. And like going to the gym, it’s not something you can do just once if you want the full benefit. Changes in your life should drive changes in your budget. A new baby (or even a new puppy), a divorce or a marriage, a change in your job situation: all of these can impact your finances, and planning now can save pain later.If you’re spending too much, can you reduce some of your discretionary expenses? If you’ve kept good records, you’ll know if you stayed on track or allowed a few more splurges than you’d budgeted for. Can you limit the lattes, dump the gym membership and buy a cheap bike, have game night at home with the kids instead of going out to a restaurant or movie? Perhaps, instead of having your own magazine subscriptions, you can get to know the periodicals area of your local library. Can’t cut back in one area? Make concessions in another. Maybe your employer subsidizes a bus pass so you can save on gas, for example.Tracking your spending enables you to see where you can make several smaller adjustments instead of large, painful spending cuts. And when your budget works without making you feel overly deprived, you’re far more likely to stay with it. Kiplinger offers an excellent, free budget worksheet to help you get started.
Thank you for offering the budget advice and budget sheet. I look forward to using the items. I retired this year so I will have less income in 2010 than in the past. My part time work also disappeared late in 2009.
I first became a member when my former husband accepted a job at Group Health in the early 1970s. Eventually I also worked as a pharmacist at Group Health until the early 1990s when I was riffed during a down turn in the economy.
In 1999 I moved to the Wenatchee Valley to open and manage the pharmacy for the Community Health Clinic and then opened and managed a pharmacy for a grocery chain. Eventually I stepped down to part time so I could spend more time with family. My part time position disappeared last summer.
As I wait for my home in East Wenatchee to sell, I need a plan on how to afford a “roof over my head” as I return to the Seattle area where everything connected with housing and utilities will be more expensive.
I have belonged to the Credit Union for many years. I elected to continue with the Credit Union when I moved to Wenatchee ten years ago.
Thank you for all of your excellent service over the years.
Sandie Hagan
Ms Hagan,
Thank for your comments–we try very hard to serve our members to the best of our abilities, and it’s always gratifying to hear when members are happy with the job we’re doing. As for setting up a plan, I’d like to suggest that you schedule a free, confidential appointment with BALANCE. They’re a financial counselling service for people in any and every economic situation, and they’re extremely helpful in setting up budgets and setting (and realizing) financial goals. This service is free to our members. And please let us know if/when we can serve you further!