10 simple money moves to make before New Year's Day
By Maryalene LaPonsie/MoneyTalksNews
The presents are opened, the paper discarded and the leftovers are in the fridge. You know what that means: Just a few more days to make some year-end financial moves. Sounds tedious, but making them will help you improve your security against identity theft and give you a better picture of your financial health.
No one of them should take long -- you can probably knock them out during the commercial breaks of your favorite TV shows.
Click ahead for a look at 10 simple money moves to make before New Year's Day.
1. Change passwords
Make a point to update all your passwords for next year, especially those for bank, credit card and other sensitive accounts.
You could use a notebook and pen to record your new passwords, but a much better idea is using one of the numerous free password manager programs available. Most will generate and store strong passwords for you. You only have to remember one. (See our articles "A Simple Way to Make Hackers' Lives Harder and Yours Easier," and "Five Password Managers to Keep All Your Secrets Safe.")
2. Request a free credit report
Another quick and easy money move is to get your free annual credit report. Federal law entitles you to one free credit report from each of the three major reporting agencies every year. Download one and review it for mistakes or suspicious activity.
Make sure you are requesting your reports from AnnualCreditReport.com, which is the only website authorized under the law to provide free credit reports. Other websites might send you reports, but there's usually a catch. For example, the site might automatically enroll you in a credit monitoring service or some other subscription program. (See: "How to Get Your Free Credit Report in 6 Easy Steps.")
3. Review your FSA balance
A rule enacted in 2013 permits employers to let flexible spending account participants roll over up to $500 to the next year.
Note, however, that employers aren't required to offer a grace period or a rollover. So now's the time to find out your employer's policy. If they're not participating in either option, it's time to go shopping. Spend that money on qualified expenses by doing things like refilling prescriptions or maybe buying new glasses.
4. Complete an investment review
Sound time-consuming? Not really. You can do an investment review in 15 minutes or less with these steps. In a nutshell, you want to check your investment performance, review your fees, and reallocate balances if needed.
5. Sell losses to offset gains
While you have your investments in front of you, look for losers and consider unloading them. Selling a stock or other security at a loss can offset investment gains you've taken during the year, thus lowering your tax bill.
If you don't have gains, losses can also be used against up to $3,000 of your regular income. Net losses exceeding $3,000 will be carried over to future years.
Two caveats:
Losses in tax-advantaged retirement accounts, like an IRA or 401(k), aren't deductible.
You can't game the system by selling a stock at a loss, then buying it back a few minutes or days later. For an investment loss to be deductible, you can't purchase a substantially identical security within 30 days before or after a sale.
Confused? Check out "Sales and Trades of Investment Property" from the IRS.
6. Scan and shred paperwork
Have a teen in the house? Let them scan in the mess of paperwork you've been hoarding all year and then shred the originals (unless they're the kind of documents you need to keep). If that doesn't sound like fun to them, you could always pay a few bucks.
For those of you who are childless, never fear. This is a rather mindless year-end task that can be easily accomplished during an "It's a Wonderful Life" marathon. (For more, see "Don't Store Your Tax Return -- Toss It Out.")
7. Make a will
This may not seem like a quick and easy money move, but if you have a simple estate, there's no reason to make things complicated. Search online for "will template" and your state, and you'll find all sorts of fill-in-the-blank wills that can be downloaded free. If you don't have a will, these will do for now.
If that doesn't sound like an adequate long-term solution, you can always have your Internet will reviewed by an estate attorney later. But even a cheap Internet will that you prepare is better than none. (Also, check out "Ask Stacy: Can I Write My Own Will?")
8. Create a budget
You might think creating a budget will take all day. Maybe in the past, but no longer. All you need these days is the use of a free service such as PowerWallet.
When you use a site or app like Mint or PowerWallet, you give it your bank account information and create expense categories. Then your goals and spending are automatically tracked and updated.
If you want to stick to the old-fashioned method of budgeting with paper and pencil, no worries. Just check out these free budgeting worksheets.
9. Update beneficiaries
The end of the year is a good time to review your beneficiaries and update them as needed. Did you get married? Divorced? Have kids? Have a falling out?
Make sure you have the right people listed as the beneficiaries on accounts such as:
- Life insurance
- Annuities
- Bank accounts
- Retirement accounts, including IRAs and 401(k)
10. Purge the excess and get a tax deduction, too
Last but not least, we come to a fun one -- or at least I think it's fun. Grab a bag and pick up everything you no longer love. I'm talking old knickknacks, excess blankets and outgrown toys, among other things. When you are folding laundry, set aside everything that is too small, too big or too dated for you.
Load it all up in the car, and the next time you're out, drop it off at the local thrift store, mission or Goodwill shop. Ask for a receipt and not only start 2016 with a less-cluttered house but also with a nice deduction for your taxes.
Make the most of the last days of 2015 by making these 10 easy money moves. They don't take much time and once done, you'll be one step closer to starting 2016 with a clean financial slate.