Being in charge of the household finances is a tough job, one not to be handled alone, especially with so many different pieces and levels of expertise that are required. Not only should you bring in a significant other, or family member or friend that you trust in order to bounce ideas off, it’s a good idea to have a tax advisor and/or financial advisor to ensure you are best set up for the future. There are a few areas that are good to be sure that you are not missing out on to get the tax deductions and money savings in order to free up extra money to pay off debt and save for your future.
Review Credit Report/Score Often
There is so much fraud these days, I’ve been hit twice in the last year, so it’s a good idea to not only review your full credit report at least yearly, but now that the credit score has been added to monthly credit card statements, you can see the score go up or down each month to ensure that you are still in the right direction. If you see the score significantly dip there is cause for concern. With the recent Equifax hack of information, it might be a good idea to put a credit freeze on your account as well so you can be certain that no new accounts are taken out in your name.
Go Over Credit or Debit Card Statement Line by Line
It can be tough to free up money every month, so as you get to where you start nickel and diming, a good way to see what you are spending each month is to actually take the debit or credit card statement and go line by line, talking through every purchase made on the account. From there you can put into categories of necessary or unnecessary. Add up the unnecessary and see how much extra money you could have in your account after last month, it could be shocking.
Use a Credit Card for Every Purchase
Not only are credit cards great for fraud protection, in the fact that if fraudulent charges are on your account, you can dispute them and while you wait for the charges to come off, they were not taken out of your debit card while you wait. Depending on the size of the purchases, it could wipe out your account, and you’re stuck until you wait for the money to come back to you. In addition, rewards are great in the fact that just by making the purchases you were going to make anyways, you can earn rewards points or dollars, free money essentially.
Take Advantage of Employer-Matched 401(k) Contributions
Even though retirement may be the furthest from your mind now depending on where you’re at in your career, but the longer you wait to focus on retirement is that much less that you will earn over time and not have when you are ready to walk away from work. If you are wondering how much to contribute, you should at least contribute at the minimum, what your company will match, so if it’s say 6%, at least do that because otherwise it would be leaving free money on the table.
Build an Emergency Fund
Money is tight, I get that, and you may be making it through paycheck to paycheck, month after month, but what if you get hit with a huge financial expense, how would you pay for that? If you had a huge auto repair, or needed a new home appliance, or if the worst occurred, losing your job and needing funds to tide you over until you found a new one. Unfortunately, those unexpected expenses would probably have to go on a credit card, putting yourself in debt and now figuring out a way to pay back over time. If you are able to save up a few months’ worth of expenses in an account to have on hand when you need it, you could give yourself a much-needed cushion.
Start Gathering Up Charitable Donations
We have a few more months until the end of the year, and tax season is just around the corner, so instead of waiting until the last week of December to get your charitable donations in order, now could be a good time to clean out the closets and storage to find clothes and other household items that you can donate to charity for a good cause and ease your tax burden.