This was originally published on Monday, November 14 ,2016 in the Pacific Daily News. Click here to subscribe to the PDN.
The holidays will whiz by in a flurry of parties, cooking and gift buying and before you know it we are welcoming 2017. As the year is winding down, take some time to prepare for next year.
Here are a few suggestions on getting 2017’s personal finances started in the right direction:
- Visit your financial planner/adviser. Just like you see a doctor for a yearly check-up, you should do the same for your personal finances. A yearly check-up ensures that you are meeting your financial goals. It may reveal that you may need a readjustment. Talking with your adviser could also help you take advantage of time-sensitive tactics that could save you money in the coming year.
- Retirement assets. You have until next spring to make a 2016 contribution to an individual retirement account. However, contributions to your 401(k) are only deductible when made in the same calendar year. According to the Internal Revenue Service, the 401(k) contribution limit for 2016 is $18,000. Are you putting all you can into your 401(k)? If your company matches your contributions, are you taking full advantage of the match? If you aren’t, you’re missing out on doubling your money. If you aren’t maximizing your contributions, take a look at ways that you can add to your 401(k) next year. Consider switching your traditional IRA to a Roth IRA, which has the potential to grow tax-free.
- Car insurance. Take a good look at your auto insurance. Are you paying for coverage that you may not necessarily need? Ask your insurance provider if you qualify for any discounts. Some providers give discounts for years of safe driving, to students with good grades or for referring a friend or family member. If you added or removed a driver, ensure that your account reflects the change.
- Home insurance. Did you make home improvements to your house this year? Your homeowner’s insurance must reflect the change. Did you recently buy a home security system or surveillance cameras? Talk with your insurer to see if there is a discount for having extra protection for your home. Did you make any large purchases such as jewelry, a television, a camera, etc.? If so, you may want to add extra protection and get them covered by your insurance.
- Health insurance. Did you have any new health issues arise over the year? Review your plan to see if your insurance will cover the procedure and medications. Will your insurance cover procedures that have to be done off-island? What is the maximum that insurance will cover for your procedure and medications? If your health has improved or you are in good health, consider a lower premium plan. Did you welcome a family member or have a child who now has his or her own health insurance? Inform your insurance company if your dependents changed.
- Donate to charity. Donating always brightens the holidays and can help reduce your tax bill. Dec. 31 is the deadline for charitable contributions that can be deducted. Not all contributions have to be money. Clothes you no longer wear, toys the kids are too old to play with, furniture you are replacing and other household goods can be donated and count toward your deduction. Obtain a tax receipt from the organization.
Michael Camacho is president and chief executive officer of Personal Finance Center. He has more than 20 years of experience in retail banking and at financial institutions in Guam and Hawaii. If there is a topic you’d like Michael to cover, please email him at email@example.com and read past columns at the Money Matters blog at www.moneymattersguam.wordpress.com.