With the end of the year approaching, it can seem like everything is happening at once: school vacations, holiday travel, parties and year-end work projects that need to be tied up.
That's why the last two months of the year can be a time when Americans neglect to take some financial steps that can save them time and money later on. Getting into good financial shape is clearly a goal that Americans aspire to, according to Merrill Edge. It found in a recent poll of what it calls "mass affluent" consumers that more than two-thirds believe they'll save more in 2016.
Mass affluent Americans, who have investable assets of between $50,000 to $250,000, also plan to spend less and invest more next year, said Aron Levine, the head of Merrill Edge. But, he added, those goals "keep failing to translate into actions."
"It's very challenging right now," Levine said. "The lack of retirement savings is due to some real competing priorities. Some people want to pay down debt, especially student debt. For people who have just graduated from college, their first interest is to pay down debt, and that's not a bad thing."
But Americans often fall deeper into debt over the holidays, which makes this time of year especially important for setting a clear financial agenda. In addition, Americans face several health-care-related open-enrollment periods in November, which will require everyone from seniors to independent contractors to reassess some aspect of their financial demands in 2016.
Read on to learn about how to avoid 7 financial pitfalls this fall.
Neglecting to set financial goals
Heading into the holiday season, it's important to keep track of what you're spending as well as how that will affect not only your retirement savings this year but in 2016.
"Every dollar you spend means there's one that's not available for future savings," Levine said. "When you get into Thanksgiving and the holidays, no one is talking about retirement."
Consider taking some time to set up a financial plan that expresses your priorities, such as saving for education, paying down debt or putting away money for retirement. Aside from budgeting, fall is a good time to assess your retirement account's asset allocation and consider making changes for next year, depending on your goals.
Not taking your 401(k) match
It may seem like a no-brainer to take extra money offered by an employer that offers a 401(k) match, but a surprising number of workers fail to do so. According to advisory firm Financial Engines, about one out of four employees don't take their company's match, leaving an average of more than $1,300 on the table.
Why is that? Some employees may feel they don't have the financial flexibility to set aside enough of their income to trigger the match, given that some companies set savings thresholds before they kick in their own contributions.
Workers making less than $40,000 are more likely to skip out on the match, which may mean they're too strapped to put enough aside to earn the contribution.
Merrill Edge's Levine also advises Americans to max out their 401(k) savings.
"Anyone who isn't maximizing their 401(k) are hurting themselves twice, because they aren't saving as much as they should," he said, "and they're missing out on free dollars."
Not reassessing your Medicare Part D
For the senior crowd, fall brings the all-important Medicare open-enrollment period, which runs from Oct. 15 to Dec. 7.
During this period, some seniors neglect to consider making changes to Medicare Part D, which provides coverage for prescription drugs. That can prove to be a costly error because plans change what they cover each year, as do people's prescriptions. Reassessing which plan works best for your wallet can save you thousands in drug costs in 2016.
One financial planner wrote in Forbes that a client saved more than $6,000 per year by reevaluating his Part D plan during open enrollment. While others may save hundreds instead of thousands, it's worth checking whether you're set up for the right plan next year.
Failing to comparison shop during Obamacare open enrollment
The Affordable Care Act's open-enrollment period began on Nov. 1 and runs until Dec. 15, providing people who are buying health care through the exchanges to sign up for a new policy and comparison shop.
It's important to check if your existing insurance plan has changed premiums, deductibles or doctor and hospital choices, according to health insurance search engine HealthCare.com. Next, examine your health care spending and costs for the past year as a way to estimate what your expenses might be in 2016. Lastly, if your income rises or falls in 2016, that could affect your subsidy, if you got one this year.
Based on that information, consumers should reexamine their existing plan. If it doesn't make financial sense for 2016, the open-enrollment period is when you should shop around.
Forgetting to use your flexible spending dollars
If you've set aside money in a flexible spending account (FSA), now's the time to start thinking about how to use it. Because some companies still stick with a Dec. 31 deadline for spending that money, check to see if your company is one that does so, or if it gives you until March 15, as the IRS allows.
Many companies offer enrollment in health care or dependent care flexible spending plans in the fall, so it's also wise to consider your spending in those two areas and sign up for 2016 if it makes financial sense.
Postponing IRA savings
America's growing ranks of freelancers and independent contractors don't have access to employer-sponsored retirement plans, which is why it's important to set aside money in an IRA plan. The good news is that workers have until April 15, 2016, to contribute for the 2015 calendar year.
Workers under 50 can contribute a maximum of $5,500 to either a Roth or traditional IRA, while those over 50 can set aside as much as $6,500.
Neglecting charitable donations
While you can contribute to your IRA until next April 15, charitable donations have to be made before Dec. 31. That means taxpayers should start planning their charitable giving now, if they haven't already considered donating money or property to a charity.
Donations made via credit card before year-end count as a 2015 contribution, even if you don't pay your bill until next year, while checks need to be mailed before Dec. 31. Remember that deductions are only for taxpayers who itemize, so that excludes those who take the standard deduction or who file a short form, such as 1040EZ.