2015 has rung in a brand new year and yet there is still a lot to wrap up; credit card statements, travelling plans, taxes, gifts purchasing, parties and much more. This is also a great time to reflect on your year’s mistakes that left you with an empty wallet, and this year’s resolutions. Check out the following items to ensure that you are on a right track before taking steps towards a new beginning.
Did you spend well?
Determine whether all the decisions you took, financially, were sound or not. Did they leave you in a lurch? Look at your credit report of 2014. Is your credit card debt a lot higher than you expected? Based on everything you deduce, make a budget and go out of your way to live by it. Jot down your money goal, where you are and where you want to reach and do everything you can to realize it. Set up an emergency savings account, pay off your interest eating debts and cut down the habit of eating out every other day. Keep this all in front of your eyes every time and you will do beautifully.
Get a head start on your tax returns
Fix a meeting with your accountant, if you have one, or do it yourself. Plan your tax related activities such as collecting documents, receipts, calculating deferred income, or a tax write off by making a donation. Doing so earlier than the due month will allow you to avoid the rush and chaos that is such an integral part of the tax calculation and return filing procedure.
Can you cut down on costs?
After accessing your spending patterns you can see your wallet mix. If majority of your expenditure has been towards petrol expenses, check whether you are paying fuel surcharge on your existing debit or credit card. If yes, then opt for co-branded credit cards where there is no fuel surcharge and some added reward points for fuel. You may also need to check if you opened too many accounts in the year and may be paying low AQB charges for not maintaining balance. Have you not been able to use certain memberships? Discontinue them. Has entertainment been your major costs? Look for co-branded cards that give you deals on movie tickets and food. Have you been spending too much on books that you never read? Invest in an e-book reader.
Reevaluate your investments
A year has passed by since many people last checked the value of all of their investments. It’s time to contact your financial advisor or ask your bank to determine what the value of your assets is today. If you have invested in stocks, SIP mutual funds or any other debt and equity portfolio, reassess the value and analyze the market for how it is going to be in the coming year.
Has there been an addition to your family?
If there has been a change in your family such as marriage, death, divorce or birth of a child, this is the right time to revise your withholding of tax with the human resource (HR) department of your company. This may increase the amount of income you get in hand. Before making any decision, consult with an accountant and ask him to determine which kind of withholding will work best for you.
Reassess your insurance
Re-evaluate the insurance premiums you have been paying – home, vehicle, medical and life insurance. Study it closely to see if it allows you to afford any extra expense in the coming year. One more thing you can do is watch the policies offered by the competitors in the market and switch to a new plan if you will get a more profitable deal. Various things can happen in the span of a year, consider your options; is your insurance plan best for you?
Make a donation
Lastly, do not under estimate the power of a donation. While it is a best way to put smiles on the faces of the needy ones, it also helps you in saving substantial amount of tax through a deduction. Ask your financial planner about the details – the best way and place to donate, how much deduction you can get, etc.