Countless companies scaled back from 2008 through this year. For some that has meant unemployment, starting a new job, starting retirement, as well as added responsibility for those still employed. While the economy continues lumbering towards a recovery, look for companies to begin hiring, giving out bonuses, and raises. Regardless of your situation it makes sense to have your finances in order to spring into action.
1) Complete your taxes as soon as possible. Whether you use H&R Block Tax Cut, Intuit’s Turbo Tax, or a CPA, completing your taxes early can give you peace of mind as well as time to pay without penalty if you owe Uncle Sam. Additionally, if you complete your taxes early you will receive your refund early! Don’t be scared, just bite the bullet and get your act together a little earlier than normal.
2) Make sure your 2011 W2 reflects your current situation and will cover your tax burden. While several commentators will tell you to pay in as close as possible to ensure you receive no tax refund, paying a little extra throughout the year ensures you will not have an unexpected tax bill next year. Unlike most creditors’ Uncle Sam is strict, lacks compassion, and is hungry for each person’s share of tax revenue. Keep it simple with your W2.
3) Start an emergency fund, and if you already have one make sure it will cover 3-6 months expenses. Reality is that unexpected things happen: an unexpected auto repair or tire replacement, unexpected illness/injury, or even losing a job. Any one of these could create financial hardship if you aren’t prepared for the unexpected, and by simply setting aside a little cash each month, you can lessen the blow.
4) Pay down any debt. While a majority of Americans have paid down some debt, as a whole we still owe a substantial amount. By continuing to get rid of debt you will free up more of your hard earned money to do the things you want. This also means avoiding late fees, interest charges, and racking up new debt.
5) Give money and time away. If you’re fortunate to be employed, give money to those less fortunate. It is pretty easy to take a look around and see those who have lost jobs, lost their homes, or worse. Or if you’re a person who is unemployed, newly retired, and feeling like everything is against you, give of your time and energy. What you will discover is that your situation could be worse, and you will get the satisfaction of working on something as well as using your talents.
6) Pay bills on time all of the time! Make it a point to have enough money to pay your bills as they become due. Unfortunately most people do not realize that they will be charged higher deposits, face higher rates, and even miss out on job opportunities because they do not pay their bills on time. If one in particular always comes at the wrong time, speak to the organization and try to change when the bill is due. If that doesn’t work then change your spending habits to have enough to take care of the bill. Think of it like this: late fees are the same as losing $20 to $35 every month! Who wants to do that?
7) If you can’t pay your bills, be honest. Unfortunately many people refuse to speak to their creditors when times are tough. Most creditors will do anything to ensure the debt they are owed will be paid, and a vast majority will be more than willing to make accommodations to see this occur. Once this happens be sure to get it in writing, have the details of the conversation documented, and follow through with the arrangement.
As 2011 quickly accelerates into view, decide to take control of your financial destiny by following the above principles. You will be glad you did, and you may even be surprised at what you discover.