Knowledge Hoop

It is hard to believe that we will be ‘ringing’ in the new year in less than two weeks.  If you’re like me, you’re probably wondering what happened to 2011.  Over the course of the next week, many of us will spend time with family, give and receive holiday gifts, and take a break from our normal work schedule.  During this time, each one of us has an opportunity to perform those administrative tasks that we often put off by saying, “I’ll get to it later.”

As we prepare to say goodbye to 2011, performing the following seven tasks will help you transition to 2012 with ease:

1.       Purge Old Mail – This is definitely on my to-do list.  I have a difficult time ‘releasing’ mail.  I often keep it with the intent of reviewing it or filing it.  Because this is a task that I dread, I have procrastinated to the point that I now have a significant amount of mail to shred!  If this is your fate too, set aside a day during the holiday and just do it.  I will be joining you on this journey.  I am looking forward to the sense of accomplishment that I’m sure I’ll have once my kitchen counter is cleared of its current clutter.

2.       Review Your Flex Spending Accounts (FSAs) And Use Remaining Balances – This is something that you should do right away.  If you have elected to participate in the FSAs offered by your employer, you’re more than likely aware of the spend it or lose it policy.  Make it a point to review any remaining balances, and if needed, schedule your final dental or doctor’s appointment for the year.  Additionally, review the list of eligible expenses and take advantage of those as well.  For those of you that haven’t taken advantage or are not familiar with this type of account, an FSA allows you to set aside a portion of your pre-tax earnings to pay for qualified expenses.  FSAs are most commonly used for dependent care or medical expenses.

3.       Prepay Your Mortgage – I’m sure that most of us are familiar with the term mortgage interest.  If your payment is due January 1, why not pay it before the end of December to ensure that your mortgage interest is captured on your year-end statement for tax purposes?

4.       Clean Out Closets And Make Final Donations – Similar to the purging mail concept, get rid of those items that you no longer wear or need.  I know that we’ve all heard the phrase, “One person’s trash is another person’s treasure.”  During this time of year, it’s important to consider those that are less fortunate; it’s the right thing to do, and it’s also a tax deduction.  Don’t forget to request a gift receipt for your records!

5.       Make a Contribution to Your Retirement Account – If you have an IRA, you have until April to contribute for tax purposes, but if you are contributing to your employer administered 401k, the deadline is year end.  There may still be time to contact your benefits department to increase or make a final contribution for the year.  The IRS communicated that the annual maximum contribution for 401ks is $16,500 for those under 50 and $22,000 if you’re older.  If you’re contributing to an IRA, the IRS reported that the maximum contribution is $5,000 for those under 50, and $6,000 if you’re older.  

6.       Review Your Beneficiaries – While you’re making your final contributions for the year, take a moment to ensure that you have beneficiaries listed on all of your investment accounts.  This is extremely important.  If your company has an open enrollment period and you’ve added or confirmed the beneficiaries on your life insurance, you may have assumed that it also covers your retirement accounts; it doesn’t.  Check each investment vehicle separately and verify that you have at least one beneficiary listed.

7.       Write down Your Achievements for the Year – No matter what’s happened to you this year, you’re still here, which means you still have opportunity.  Life is a journey that is filled with ups and downs.  Before you celebrate a new year, take an opportunity to reflect on those things that went well for you in 2011.  Perhaps you didn’t achieve every goal, don’t waste time thinking about what you didn’t do; take a moment to ‘pat yourself on the back’ and say, “job well done.”  Make a commitment to become your own cheerleader.  You are worth it!

I hope that this blog post has given you some ‘food for thought.’  This is indeed the most wonderful time of the year.  As you enjoy your time with family and friends, make a commitment to complete some of the administrative tasks that we often put off.  While it is important to ‘handle our business,’ I ask that you make a commitment to be ‘present.’  As I close, I’ll leave you with the following quote, “Yesterday is history. Tomorrow is a mystery. Today is a gift. That’s why it’s called the present.” ~ Unknown

From my heart to yours, Merry Christmas!