Summer is the time to lay back, relax, and enjoy the lazy days of summer. Right?
It’s also a great time to begin thinking about your personal finances. Avoid putting your finances on the backseat this summer by planning now. Here are five topics to consider:
- College financial planning
- Holiday budgets
- Vacation budgets
- Tax season
- Gift giving and donations
We’re not here to rush the year along, but rather to help you prepare for those financially-intensive months that occur later in the year.
College Financial Planning
College and high school graduations may be happening, but the financial burden may just be beginning. Here are some tips to help you or your college-age children prepare for their first large expense.
- Grace Period: Though you may have six to nine month’s grace period before paying back student loans, saving a little now will help lessen the burden during the holiday season.
- Discounts: Some lenders offer discounts or reduced interest rates for automatic deduction from a checking account. This helps the borrower save money over the length of the loan, and helps you to manage your budget.
- Student Load Interest Deduction: Learn about the student loan Federal deduction (Form 1098-E) now so you are prepared at tax time.
It’s still summer after all, but that doesn’t mean you should just wing vacation spending until next year. There’s still time to plan for a summer or fall vacation this year. Consider:
- Downloading a flexible vacation planning spreadsheet you can use to help track expected and unexpected vacation expenses.
- Avoiding Peak Travel Time: Though you may be tempted to travel when everyone else is scheduling vacation, taking a trip on an off-peak weekend or holiday can save you a bundle.
- Booking Flights on the cheapest days to fly—Tuesday, Wednesday, and Saturday.
- Using a travel budget calculator to help organize expenses and determine if now is the right time to take that trip.
- Looking for discounts online by comparing hotels, airfare, car rental, etc.
Gift Giving and Donations
- Many people wait until the end of the year to make contributions or deduction to charity. Here are some tips to help you plan throughout the year for the gift giving and donation time. These are also great ideas for those who make donations in a new couple’s name for weddings, or for those who donation on behalf of a student to an organization they love.
- Keep donation records. Hold onto receipts, flyers, organizational information, etc. regardless of the amount, in a case a donation is questioned you have the documentation to back it up.
- Plan ahead. If you traditionally make donations to the same organizations, plan for those donations throughout the year. Five dollars per month may sting less than sixty dollars are the end of the year.
- Remember cash contributions. According to the IRS, “Generally you may deduct cash contributions and the fair market value of most property you donate to charity.” Rules apply for several property types, such as clothing, household items, cards, and boats.
- Donate to qualified charities. Check the Exempt Organizations Select Checklist help ensure the organizations you’re donating to are qualified charities according to the IRS.
We all want to make the most of the holiday season, but are often taken off guard by some of the expenses that pile up during that time. You still have several months before the rush hits. Ease the financial burden now by:
- Downloading this holiday budget planner to help you stay on track.
- Determining what you can afford to spend and then set is as the overall spending budget. Download this Gift Spending Worksheet to keep things organized.
- Keeping track of the spending throughout the seasons, with a running total with amounts over/under.
- Recording the spending so you have a helpful tip sheet for the following year.
Many of you may have just received this year’s tax return. It’s not too early to begin planning for next year. Here are some tips for things you can do now to prepare:
- Adjust your withholding: Review your current withholding amounts and determine if you want to get a larger check once per year, or keep the more money in your paycheck throughout the year.
- Keep organized. It’s tough to collect all the files needed for year-end taxes. Why not start organizing things now?
- Interview tax professionals now. Why wait until you have your W-2 in hand to begin searching for a tax professional? Now’s the time to interview them, find out their process, and ask for help in organizing what you’ll need for next year’s return.
- Prepare for an extra payment. If you claim a standard deduction, but are close to the itemized deduction mark, consider bundling deductions. According to the IRS, “If your itemized deductions typically fall just below your standard deduction, you can ‘bundle’ your deductions. For example, an early or extra mortgage payment or property tax payment, or a planned donation to charity could equal some tax savings. See the Schedule A, Itemized Deductions, instructions for the list of items you can deduct.”
Don’t let the lazy days of summer prevent you from planning for some of the big expenses you might have coming later in the year. Contact Lang Allan and Company for help in preparing your plan.
Lang Allan & Company offers several financial calculators to help you prepare for college funding, create a saving budget, determine mortgage loan prepayments, and more. Visit our site today and begin reaching your financial goals.