The month of September signals a lot of things: back to school, cooler temps, football, pumpkin-spice everything—and a chance to assess your financial progress and tackle some tasks that’ll help you finish out the year strong. If January is the time for making resolutions, September marks the homestretch in actually completing them.
Here’s how to set yourself up for a prosperous 2017—and beyond.
Yes, the holidays are still a few months away. But considering the average person who relied on credit for holiday expenses in 2014 added $986 to their debt load last year, the time to start setting money aside to cover holiday costs is now.
Start by writing down everything you expect to spend on this season—from food and decorations to wrapping paper and gifts—using last year’s expenses as an estimate, suggests Certified Financial Planner Mitchell Kraus, owner of Capital Intelligence Associates in Santa Monica, Calif. The benefit is twofold: First, you can calculate a weekly savings target, and devise a way to get there. For example, if you want to bank $500 by Thanksgiving, you’ll need to set aside $50 a week starting now. Decide whether you’ll borrow that cash from another budget line item—like eating out or entertainment—or if you’d rather pick up some side income.
Knowing your expected expenses early also allows you to take your time scouting deals, says Pamela Capalad, a Brooklyn-based Certified Financial Planner and owner of Brunch & Budget. By the time Black Friday rolls around, you can rest easy knowing you’ve successfully avoided the holiday rush.
Whether you want to spend the holidays with family, or escape the February cold in Aruba, it pays to start planning—and saving for—winter travel now. While CheapAir.com found that the “prime booking window” for flights is 54 days out, they recommend booking earlier than normal when you’re traveling at peak times, like the holidays. If you have some flexibility, aim to travel on off-days: Kayak and BuzzFeed research found that Tuesdays and Wednesdays are cheapest for departures, and Monday is the best day for a return trip.
Of course, as Eric Roberge, Certified Financial Planner and owner of Beyond Your Hammock points out, it’s almost impossible to time the deals perfectly. “That’s why it’s important to start setting aside the funds you’ll need, so that when a deal comes along, you can jump on it,” he says.
If you don’t typically think about taxes until spring, you could be missing out on key opportunities to minimize what you owe Uncle Sam. Supporting your favorite cause—be it the Salvation Army or your local animal shelter—is a popular (and enjoyable) way to do that over the holiday season. Just don’t forget to factor this expense into your holiday budget, and hold onto receipts and other documentation to reference it when itemizing your deductions next year.
Year end is also a great time to reassess your 401(k) or IRA contributions, which have limits of $18,000 and $5,500 this year, respectively, because they lower your taxable income. Bumping up your savings rate now—even just by a percent or two—can help you next spring and down the road. (Note that you can actually make 2016 contributions to your IRA through mid-April 2017, so there’s still time after the New Year.)
Whether it’s your annual raise or a quarterly/holiday/year-end bonus, many Americans have come to expect a little something extra from their employers toward the end of the year. In recent years, employers have doled out 3 percent raises, and bonuses of about 5 percent of non-managers and 8 percent for managers.
While it might be tempting to use that extra money to splurge during the holidays, Mary Beth Storjohann, Certified Financial Planner and founder of Workable Wealth, suggests a smarter, more measured approach: “Use 50 percent of any extra cash to pay down debt, 30 percent to bolster your savings and spend 20 percent on yourself,” she says. “That way, you can treat yourself while also making progress on your bigger goals.”
In 2015, the average health insurance deductible was more than $1,300, and 20 percent of workers paid $2,000 or more. That’s a lot to shell out before insurance kicks in, and there are few feelings worse than watching that number reset to $0 at the start of the new year. So if you’ve hit your deductible, or you’re close, make sure you get your money’s worth.
Been nursing a nagging cold or injury that won’t go away? Visit the doctor now for a small copay and get it addressed before it gets worse (probably in January) and your bill is much higher, Kraus says.
While you’re at it, don’t forget to use up any money leftover in your Flexible Spending Account, as that money will eventually expire. “Dentist appointments, annual checkups, updated contact or glasses prescriptions [and so on] should all be taken care of before December 31 to take advantage of the money you’ve already set aside for this spending area,” Storjohann says.
Maybe you started the year with a goal of adding $2,500 to your emergency fund or contributing another 2 percent to your retirement savings. Or maybe you had something a little more gratifying on mind—say, saving up for a new camera or a trip to London. Are you on track to hit these goals?
Take some time to check in on your progress, Roberge says: “This will allow you to make specific adjustments if necessary, which is key to hitting your goals.”
Discovered you’re nowhere near where you thought you’d be at this point? Dial your goal back to something you can reach by year’s end—say, saving $500 instead of $2,500—and work toward that instead. Saving some is better than giving up and adding nothing to your account, and this little “win” can give you a nice psychological boost to save even more next year.