End of the Year Financial House Cleaning: YNAB, Retirement Contributions, Charitable Giving, and More

ynab financial freedomA good buddy of mine recently approached me about making smart end of the year financial moves. One of the first things I suggested to him was to set savings goals for the new year. He admitted to me, then, that although he and his wife had nearly doubled their income over the last two years, they still weren’t getting ahead. They were doing more and buying more, but they couldn’t seem to save anything. One of their main problems, he said, was that they were just too disorganized. I suggested that they try to get things under control using a budget software like YNAB.

He had a number of excuses to explain why they hadn’t tried finance software yet. She was an independent contractor so her income was always fluctuating, and he had bad spending habits that he could never seem to get past. YNAB, as I told him, is ideal for people with fluctuating income and varied bills. It allows users to easily enter data that changes from month to month or even week to week.

Truthfully, no finance software is a cure all. My friend needed to make some real changes. He needed to stop spending money before he got it, he needed to stop floating checks, and he needed to make a serious commitment to improvement. However, improving on your own is hard.

If you’ve ever tried to start a workout regime, you probably understand how much easier it is to stay motivated when you have a friend, or a trainer, or even an app to help you. YNAB, I told him, could be the trainer that he needed. It could guide and inspire him as he saved throughout the new year.

Using YNAB to get finances in order.As we continued to talk, I reminded him of a few other financial matters that he should attend to before the close of this year. I’ve compiled those tips in a short list so that you can utilize them in your own life:

  • Spend the money from your flexible savings account. This is the perfect time for new eyeglasses or boxes of over the counter medication.
  • If possible, try to reach the maximum contributions for your retirement accounts. Contributions to your 401K and your standard IRA are tax deductible, and it is important to take advantage of that.
  • Order your free credit reports. By federal law, each of the three credit reporting agencies must give you a free report once per year so if you haven’t looked at yours yet this year, now is the time.
  • Reduce your taxable income by giving to nonprofit charities. Even if you donate clothes to the charity store, you can get a receipt and claim a deduction.
  • Look through your stocks. Now, may be the perfect time to sell your losing stocks so that you can have capital losses to balance your capital gains for the year.

The end of the year should be a joyous time, a time for reflecting on what the New Year may bring. I hope that my friend takes my advice to heart. I hope that he cleans up his financial house with YNAB or another good budgeting software tool, and that he and his wife can get ahead and enjoy many future bountiful holidays together.

SitemapEntries RSS Log in