The five best money moves you can make in December
Your halls are decked with tinsel and ornaments and your fridge is stocked with eggnog 鈥� and amid the holiday excitement, you haven鈥檛 looked at your bank account balance in weeks.
You鈥檙e not alone. It鈥檚 easy to get caught up in festivities and forget about budgeting. But make a few smart moves now, and you won鈥檛 be caught off guard by monetary misfortune.
Here are five money moves to add to your holiday to-do list.
1.) Invest in your future self: Contribute to your 401(k).
In 2013, 42% of middle-class Americans said that it was impossible for them to pay their bills and still save for retirement, according to a聽. But even if you can鈥檛 get anywhere near the annual 401(k) contribution limit of $17,500, try to put aside as much money as you can, says Ken Stanley, a NerdWallet advisor from Harper Stanley Financial Services.
鈥淚f you have the opportunity to contribute to a 401(k), especially if your employer is matching the contribution, please don鈥檛 leave any money on the table,鈥� he says.
Jonathan DeYoe, NerdWallet advisor and principal at DeYoe Wealth Management, adds that it鈥檚 important to re-evaluate spending at the end of the year and see if you can afford to contribute more.
鈥淵our future self is really going to appreciate your current self鈥檚 savings,鈥� he says.
2. Protect your identity online.
About 28% of shoppers say they prefer doing holiday shopping online rather than in a store to avoid crowds, according to a聽聽by global information firm Accenture. If you鈥檙e planning to skip the long lines this month,聽聽to keep your online information safe.
Avoid looking at your online bank profile or making online purchases on public Wi-Fi. If you have lots of weak or duplicate passwords, now is a good time to change those. Monitor your credit card statements closely and report fraudulent transactions as soon as possible.
3. Give to charity 鈥� the smart way.
If you have some excess income at the end of the year and you want to give back, donating before Dec. 31 can help you benefit from tax incentives.
When donating, make sure your money is going to a worthy cause.聽聽of Americans don鈥檛 research the organizations they contribute to, according to a 2011 study by Hope Consulting. Check the Better Business Bureau鈥檚 Wise Giving Alliance to find out more about where your money is going.
4. Start thinking about taxes.
Don鈥檛 wait until April to start thinking about taxes. For new parents or recently married聽couples, filing a W-4 before the holiday season could mean less tax withheld from each paycheck. That could make a big difference during the holidays, says Harry Krampf, a NerdWallet advisor and a tax expert at TaxVigilante.net.
鈥淚t鈥檚 one of those things that people have direct control over,鈥� he says.
If you鈥檝e seen some big changes this year, ask your employer about filling out a W-4.
5. Accidents can happen at any time 鈥� get covered.
If you don鈥檛 have health insurance through your employer, now鈥檚 the time to聽in coverage through the Affordable Care Act. Enroll by Dec. 15 for coverage that begins Jan. 1, 2015. If you choose to forgo health insurance this year, remember that you鈥檒l have to聽,聽and in 2015, that will be more costly.
What鈥檚 important
Getting your financial life in order can be stressful, but once you鈥檙e done, you鈥檒l be able to focus on what really matters. That makes all the budgeting, planning and investment worth it.
鈥淚t鈥檚 really about family coming together,鈥� DeYoe says. 鈥淚t鈥檚 about thankfulness, gratitude and really appreciating what we have.鈥�
