Holiday time might be the most wonderful time of the year … but it also can be the busiest. That’s why I’ve put together this short and sweet, end-of-year checklist to kickstart your financials for the new year!
Think ahead for the new year with these five financially-savvy ideas:
1. Give to charity.
Americans gave more than $300 billion to charities in 2019. And if you’re thinking about giving in December, you’re not alone. Nearly 30% of giving happens during the last month of the year, according to Network for Good. Before making a donation:
- Do your research: Make sure the charity you choose qualifies for tax-exempt status.
- Check your calendar: Remember you have until Dec. 31 to make contributions and claim them on your taxes. Contributions made via credit card in December and checks postmarked in December count even if the check is not cashed and the credit card bill is not paid until January.
- Keep the receipt: Get a written (mailed or electronic) receipt of your donation for your taxes.
- Ask the right questions: Check out the Consumer Reports list of the best and worst charities for more information.
2. Pull your free credit report.
Did you know each of the three big reporting companies – Equifax, Experience and TransUnion – will run a free credit report for you every 12 months? This is the best way to check for errors, determine your credit rating, and make a plan to improve your credit health. Here’s an easy way to get started:
- Create a rotation: Pick one company and order your credit report in December, then mark your calendar and be sure to order reports from the other two companies during the new year. It’s worth it since each credit bureau could have different information.
- Speak up: Dispute any errors you find as soon as possible in writing by contacting both the credit reporting company and the company that provided the information. Explain what is wrong and why and include copies of documents that support your dispute.
- Get the facts: Find template letters and information about the dispute process at The Consumer Financial Protection Bureau.
3. Look for unclaimed funds.
Believe it or not, your money could be sitting in a virtual lost and found. Most of the time it is a bank account that has become dormant, proceeds from an insurance policy, or even a tax refund. When a business can’t locate someone, the “mystery” money is sent to a state-run, unclaimed property office. Until the owner makes a claim, it just sits there. Find out whether you have unclaimed funds by going to the Government’s Unclaimed Money page where you’ll find multiple ways to search. This super easy tip only takes minutes but can provide a big return. Finding some extra cash can’t hurt, right?
4. Annual Gift Exclusion
Still feeling generous? In 2020, the IRS will allow you to give up to $15,000 (cash and assets) to someone besides your spouse. That’s a per person limit so if you have three kids and two grandkids, you can give $15,000 to each — although you should check on the limit, as it can change by year.
5. Spend down your Flexible Spending Accounts (FSA).
Now is the time to take advantage of those Flexible Spending Account (FSA) funds, if you’ve set money aside in your work account.
- Use it or lose it: Be sure to put those dollars to work by Dec. 31 if you have an FSA. They can go toward copayments, deductibles, prescription drugs, and even some over-the-counter medicine or supplies.
- Find out more: Ask your local pharmacist and drug store what should be covered under FSAs. For details about your company’s specific plan, including how to sign up, ask your employer.
These quick maintenance items can help you prepare for the end of the year (which always seems to sneak up on us, doesn’t it?) — and the sooner you get the list checked off, the sooner you can kick back for the holidays and gear up for the new year!
Emily Shallal is senior director on the Strategy and Innovation team at Ally. She is constantly seeking out ways to improve our customer’s financial savvy by understanding consumer trends and habits.
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Comments
LUIS G. on November 21, 2020 at 1:27pm
Thanks Emily for sharing hop on this comings holidays
Jack u. on November 21, 2020 at 1:40pm
article number 4. Annual Gift Exclusion You really left this as an extremely vague statement. It sounds as if you are saying the IRS will only allow a person to give a gift of $15,000. Most people have no idea that they can give away as much as they want, and still pay no taxes on the gift. A gift over 15K and yes they have to report it to the IRS, but until a person gives away more than $11.58 million in their life time, they owe no taxes on the gift. Also if you give gifts under the 15K, the 2020 limit....it does not count against the life time limit. You should have at least mentioned to check IRS guidelines and the lifetime limit so those that will never have over a million, yet alone 11 million, would know they can give as much as they want with out being taxed.
Michael T. on November 22, 2020 at 10:13am
Maybe if I wasn’t charged 12.19 percent in this “rate climate” i’d feel differently....some margins you have there, and then this advice ? How about recasting my loan to something reasonable cause within one year some other lender will have my loan. Mid 600’s credit score currently....
Bernard L. on December 1, 2020 at 10:28pm
Here's another item: Verify your yields on savings. Do you still get a premium yield from your savings reserves? Always be sensitive to when your bank is cutting the interest rate and feel free to go and transfer funds to a bank with a higher yield.
Debbie S. on December 20, 2020 at 10:39am
Nicely done, good old fashion fun and helpful resources
Ally on December 20, 2020 at 11:11am
Thanks for reading, Debbie. 😊
Amy P. on December 30, 2020 at 10:55pm
Good tips. Article 4) I believe when she refers to annual gift giving maximums, she may be referring to the gift (recipient) avoiding being taxed? I am no tax expert so any feedback is appreciated. 2020 has been a challenging and stressful year for so many. Many losing their livelihood are going to be starting over. We need to look forward, and any tips that help the average person move in the right direction, is a good thing. Wishing you and yours a happy, healthy 2021.
EVERY A. on January 4, 2021 at 1:55am
ALLY IS ROGUE BANK THAT DAILY ENGAGES IN CORRUPT, LYING UNETHICAL PRACTICES & REFUSES TO RESPOND OR RESOLVE ANY ACCOUNT ISSUES. AVOID THIS BANK LIKE THE PLAGUE. CHECK ONLINE AND VERIFY THE SAME COMPLAINTS ACROSS THR COUNTRY TO THE SAME EFFECT. THEY NEVER RESPOND. THEY CHEAT THEIR ACCOUNT HOLDERS, INFLATE ERRONEOUS INTEREST TO INFLATE DUE BALANCES BY NOT RESPONDING. THOUSANDS OF THE EXACT SAME ISSUE. THIS IS A FRAUDULENT ROGUE BANK. YOU'VE BEEN WARNED. CALL THE FTC, FDIC, CPFB & YOUR STATE BANK OF TREASURY DEPARTMENT. THEY ARE LIARS & STEAL. CAN'T WAIT TILL THE CLASS ACTION SUIT IS FILED & THEY GO CHAPTER 11! RUN AND DON'T DO ANY BUSINESS WITH THIS ROGUE BANK!
Ally on January 4, 2021 at 9:00am
Hi, we’re sorry to hear you say this. Please give us a call at 1-877-247-2559 if you’re in need of assistance so we can learn more about the issue you’re experiencing. We’d love the opportunity to help!