As we approach the end of the year and probably have emptied our wallets quite a bit, I think it is time to take stock of things that we should be doing to lower our cost of living in the next year. The tips I offer will seem quite generic, but I believe that these tasks should be taken as an annual exercise. So here are 10 things that I think we should do after Christmas.
Personal Financial Planning For The Next Year: 10 Best Money Moves
1. Revisit your cable TV cost — Yes, please revisit it. Cable companies are always offering promotions as often as quarterly. But here is the catch — if you do not ask, they will not tell. If you do not have your cable, TV and internet services bundled up, then consider getting a package deal. This will often save you quite a bit of money. If you have your cable TV and internet services separate, perhaps you should explore services like Blockbuster or Netflix as an option.
2. Revisit paid memberships — Are you a gym member? How many times have you been to your gym this year? Is it really worth paying the annual fee? Can you do 50 sit ups at a go or how about 30 proper push ups? How long can you skip on a jump rope? How fast do you run 2 miles? If you cannot accomplish any of these very basic exercises, why join the gym? Might as well do this yourself and once you work up to the required fitness level and you feel you need better equipment, then rejoin your gym.
Image by Road Trip America.
3. Check magazine subscriptions — How many magazines do you subscribe to and how many of them do you actually read? I bet you have a lot of these magazines lying around unread! You probably say you’ll read them one day, but the truth is, it just never happens. Though magazines do not cost a lot, they do add up. And they do add to the clutter.
4. Enroll in a credit monitoring service — Yep, I suggest that you spend some money on credit report monitoring. Yes, you can get your free annual reports every year. But, (and this is a big but), credit card issuers are monitoring your credit report more closely these days. Many folks who have had great credit have unfortunately gotten their credit lines cut or their rates jacked up. Very often, the problem is due to some errors (negative errors) in their credit report. So in this present credit environment, I think it pays to enroll in a monitoring service (look into something like myFICO Score Watch), especially if you intend to take out a mortgage in a couple of years.
5. Check if you have the right credit card — Is your present credit card still addressing your requirements? Maybe, or maybe not. If you carry a balance, you could perhaps get a card with a lower interest rate than your existing one. Perhaps a card with a balance transfer offer makes sense. Regardless, having the right credit card can be a money saver. If you pay in full, make sure you have a credit card that will earn you the most rewards.
6. Revisit your auto and home insurance — When I say revisit your auto and home insurance, I do not simply mean that you should check if you can get both with the same provider and save money. I’m also suggesting that you check the terms of your insurance. What does your policy cover? Very often, with things like auto insurance, the cheaper insurance comes at a cost. If you talk with a number of mechanics, they will tell you that the lowest cost providers often do not want to pay for the proper cost of repairs; you may become shortchanged, and often, you may receive inferior or second-hand parts for replacements. The terms and conditions for your home insurance can get complicated too. It is worth sitting down and getting a second opinion just to make sure you know what is covered.
7. Check for mortgage refinance opportunities — Mortgage rates hit their lows a couple of times this year. If it makes sense for you to refinance, then do it. But you probably have to sit down and work out the calculations. The point is to do it. Mortgage refinancing can save you lots of money if done at the right rate.
8. Do your taxes — Yeah, I know it’s early. But it is better to be early than late. Start doing your taxes now. Do not wait. If you are organized, it should be a breeze. But if you haven’t got a system in place, I would suggest picking up tax software (if you are a DIY person). And learn them now rather than in March next year!
9. Review your investments and asset allocation — Everyone should do this but I hardly know anyone who does it. Can you answer the question “what was your investment returns net of fees last year?”. Well, that is the whole purpose of this exercise. As a reminder, you should plan your asset allocation for the next year. If you work with a financial advisor, then make sure you have a year end meeting. If you manage your finances and investments yourself, then spend some time doing some research and readjusting or rebalancing your asset allocation.
10. Have some idea about next year’s vacation — Do you plan to take a trip next year for your family vacation? Traveling costs are some of our biggest annual expenses. It pays to have an idea where you want to go and it’s a good idea to plan early. If you are the type who likes to earn frequent flier miles, then know that the best time to book is 11 months ahead. Knowing where you want to go also gives you time to search for great travel deals.
Hopefully, this article will give you some food for thought!
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{ 10 comments… read them below or add one }
Great tips. In my own case, I am going to do something to cut on airfare wastage. I don’t know if its bad planning or do I just get unlucky but every year I book a bunch of tickets that I end up canceling for one reason or another. I absolutely hate this wastage, and this year I will do something about it. I am not sure what 🙂 but something!
Good suggestions. I would add # 11: Start planning next year’s Christmas. Save up all year and pay Cash Only on next Christmas.
I would also suggest writing down all big items you spend on, so that you can keep track of your money and budget accordingly. Also try to write down in advance the things you will need to buy in the coming year.
Excellent ideas! I would also add looking at your cell phone bill. Cell phone companies are masterful about jacking up your price. Take some time to look at your text, minute, and data usage — I’m sure there are ways to cut back for every person.
For most people, something like TurboTax is sufficient for filing taxes.
There’s not downside to getting taxes done early. If you’re getting a refund, file immediately. If you’re paying, delay the actual filing/paying until April.
My wife is a CPA, and I also have a degree in accounting (but subsequently escaped to the world of IT), so we typically have our return filed within days of receiving the last necessary form.
It would also be a good idea to check your investments if it’s working out or not. Read around the web for investment opportunities. There’s a lot of them out there though. So be wise about it.
While I appreciate the helpful hints to save money on eyeglasses, Ken, I do have to warn of some of the dangers of getting your glasses online.
I am an ABO Certified Optician, and in my office I often see people who ordered their glasses online, and they were not made correctly. Also each persons head is not shaped the same, and we do the free service of fitting and adjusting the glasses to the individual person.
Some of the things to be cognizant of include if you do wear a bifocal or progressive lens, that it needs to be set at the correct height, if it’s too high or too low you will get a stiff neck trying to read with those glasses. Also if you have special needs such as prescribed prism, the lenses really need to be spot on or you will get headaches. There are other things to be sensitive to, such as materials and lens base curves. All these little things, a professional optician takes into account when making your eyeglasses.
Now to save money you don’t have to go without personal service. I work for a company that is owned by a much larger Corporation, which in turn owns most of our “competition.” My lenses and frames come from the same labs and manufacturers as the big boys, but because we are a more value based brand than our sister companies many people get the same things at much lower prices.
But while I’m here I’ll also list out a few things that bug me on a daily basis. The sales that you see on TV for “2 for 69.95″ or 2 for 99.99” These should always be listed as STARTING AT. They only include the most basic of lens and the least expensive of frames. With nicer features, the price shoots up because each one is added at retail value.
Another thing to consider is if you have vision insurance. The numbers of people with optical plans is growing daily. But vision insurance is not always a money saver. To get the nicer lens materials or even the progressive designs and such their are co-pays. These copays add up fast, and that also need to be taken into consideration on how much you pay in premiums. These figures, an honest person in the field, like me, will gladly help you figure out if it is worth paying out of your paycheck for vision coverage versus working the sales.
So my recommendation, as an optical professional, is that your eyes are worth at least a dollar a day for good vision. That means why should you have an issue setting aside about $350 a year for eye care? Many people out there spend more money on cigarettes, beer, and lotto tickets, than they do to see well.
It also pays to talk to someone who knows the product. Ask if your working with a Board Certified Optician. There really is a lot of things that go into making glasses, and we are trained to work with all those things.
Don’t be afraid to use your feet and check out other stores in the area. If your at a mall shop anyway, walk down the hall before you buy. Sometimes just the threat of shopping around will make the costly stores offer you a bigger deal.
And Last, the nicer features are suggested for very good reasons. If the person you work with doesn’t share those reasons with you, go ahead and ask them why. I personally love polycarbonate lenses, because they don’t chip or shatter when accidents happen. I also highly recommend non-reflective features for anyone who drives at night or sits behind a computer screen. It is much safer and more comfortable to see with out that light being reflected back as halos in your lenses. Also I always recommend polarized sunglasses, because sun glare off the road causes something like 30% of auto accidents. (I’m not exact on that number, but I believe it to be accurate. I don’t have the study in front of me.)
I could write for days about this, but I think these are my major points 🙂
Good advice; reviewing all your financial commitments each year, and determining where you can save money is an excellent way to start the new year off right.
I think every people have different priority in picking insurance. Until now, I only have 2 type of insurance, health and life insurance. I’m thinking to take car insurance, but the good insurance payment is relative high. I know that you get what you pay…But for now it still out of my budget. So, I prefer to drive more carefully.
Thanks for this, very useful tips. Its also a good idea to have adequate mortgage protection, such as mortgage payment protection insurance, especially in a time when the risk of redundancy remains very real.