Michelle Fox -
CNBC
+ Acorns
It's that easy, there is one month left to finish the year.
There is no better time than now to start thinking about what you can do to start the next year on the right financial footing.
"People start putting their whole lives in perspective in December," recalls Tom Henske, a certified financial planner in New York.
"Your head is already there with everyone else, so why shouldn't it be with your money habits?"
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There are also movements that can be made and that have a deadline of December 31.
"If you plan ahead, it makes quite a difference in your overall retirement financial planning needs," says Winnie Sun, co-founder and CEO of Sun Group Wealth Partners, based in Irvine, California.
We explain how you can start to have a financially healthy 2022.
Change your mindset
Fear of the unknown prevents many people from taking the first step toward financial wellness, Henske says.
Whether it's creating a 529 savings plan designed to help families save money for future education expenses, purchasing insurance, or writing your will, just get started.
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“If you want to procrastinate, procrastinate when the meeting is going to be.
Don't procrastinate to schedule it, ”Henske advised.
Extend your retirement plans to the fullest
The annual contribution limit for employee-sponsored retirement plans, like 401 (k), is $ 19,500 this year, or $ 26,000 if you're 50 or older.
If you can, try to maximize your contributions.
If you can't, try to at least contribute enough to get the full contribution from the company.
“It is free money.
Don't leave it on the table, ”Sun advises.
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If you've already reached your 401 (k) maximum or don't have one, do the same for your individual retirement account or Roth IRA.
The maximum contribution this year is $ 6,000, or $ 7,000 if you are 50 or older.
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Although you have until April 15 to reach your maximum retirement savings account for 2021, doing so now will allow you to start saving for 2022 in January, Sun noted.
Check your budget
What did you spend money on last year?
Check your credit card statements.
Many lenders even break down expenses by category.
Check where you can make adjustments for next year.
If you need to bring in more money, consider starting a side business, asking for a raise, or looking for a new job.
January and February are the best times of the year to look for work because that is when the new recruitment budgets of companies usually go into effect.
Review your investments
Although you should always periodically review your portfolio, now is a good time to check and make sure your assets are balanced.
So if you've exceeded your 10% allowance in large-cap growth stocks, for example, adjust to bring it back to 10%.
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If you have sold an asset and made a profit, consider selling an asset that is not doing so well.
This is what is called the harvest of tax losses.
By selling assets at a loss, you will offset some of the profit you made and should reduce the amount of taxes you will have to pay.
You can also gift the assets that have moved up to someone in a lower tax bracket to avoid tax impact, Sun suggested.
Check your medical expenses
If you still have money left in your flexible spending account, you may want to make that appointment with the doctor you've been putting off or purchase qualifying items to get reimbursed this year.
Although legislation enacted late last year allows you to roll over unused FSA funds to 2022, your business has a choice.
Some companies also grant you a grace period of a few months until the following year or allow you to roll over $ 550.
If you still have money in the account, check with your company to make sure you don't lose it.
Put the autopilot
Although people have the best of intentions to get their financial lives back on track early in the year, things start to unravel as the year progresses.
Henske suggests that by setting up automatic transfers from the checking account to the savings or investment account, this can be avoided.
"What some people will do is doubt the amount," he said.
"You don't have to worry about putting in $ 25 a month and just plugging it in and going," Henske added.
"It's easy to go in and change it from $ 25 to $ 250 a month," he said.
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Also check your contributions to the 401 (k) plan for next year.
While the limit for individual accounts remains the same, with a maximum contribution of $ 6,000, the maximum of 401 (k) increases to $ 20,500.
The recovery limit for those over 50 remains at $ 6,500.
This article is part of the
Invest in You Ready series.
Set.
Grow
(Invest in you: Ready. Done. Grow), an initiative of CNBC and Acorns, the microinvestment app.
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