Use this checklist to get your finances in order before 2022


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As hard to believe, we only have six weeks left in 2021. And, as always, when we come to this time of year, I reflect on what I’ve accomplished since January and reflect on what I’ve been doing since January. would like to do with my money in the coming months.

If you’re feeling the same, now is a good time to check your finances and plan for any changes you might make next year, says Sonya Mughal, CEO of Bailard, an independent wealth and asset management company in the bay area. .

“Financial controls should be treated the same as an annual review [checkup] to the doctor, ”said Mughal. “Sometimes we forget to take the time, but keeping in touch with yourself, your family and your advisor is essential. “

With that in mind, here are a few tasks advisers recommend tackling as part of your financial statement before the start of 2022.

1. Review spending for 2021

Set aside an hour or two to wade through your 2021 expenses across all categories, says Wayne Maslyk, certified financial planner and president and CEO of Ohio-based Great Lakes Benefits & Wealth Management. Are you spending as planned? Otherwise, you may need to re-budget for the new year.

“It’s a good baseline for planning the year ahead,” Maslyk says.

Record your monthly expenses in a Google document or in an app like Mint to make it easier to list your expenses and form a new budget.

2. Use FSA funds

Normally, you have to spend the money you pay into a flexible spending account for qualifying medical expenses in the year you pay it, or you’ll lose it (although some employers allow you to carry over up to 550. $).

Having said that, the the rules have changed this year. Due to Covid-19, some employers may allow their employees to defer all of their balances until 2022. If you are unsure if your employer is one of them, check with your manager or the benefits department.

If your employer doesn’t allow you to postpone everything, click here for some ideas for spending the excess funds.

3. Donate to charity

This year, the IRS allows all taxpayers, even those who benefit from the standard deduction, to deduct $ 300 in charitable contributions from their taxes (usually you can only do this if you itemize your deductions). If you plan to donate during the holiday season, or if you have donated throughout the year, you may qualify for a small tax break.

“Donating to charity can be a great way to save money on taxes,” says Tony Molina, chartered accountant and product evangelist at Wealthfront. “Assuming you have a marginal tax rate of 30% and you maximize the deduction, that’s a savings of $ 90 and you’re helping others. “

4. Create a worst-case plan

Everyone should have a backup plan. Spend a few minutes updating the beneficiaries on your financial accounts, including retirement, investment, and benefits accounts. Then, if you still feel inspired, revise your estate plan. Make sure you have:

  • A lasting power of attorney, which ensures that someone you trust will pay your bills and handle other financial affairs if something happens to you.
  • A health care attorney or power of attorney, who can speak on your behalf in medical situations if you are unable to do so.
  • A will, which establishes who you want to give your property to after your death. If you have children, you can also appoint guardians for them.

All of this is especially important if you’ve never done it, or if you’ve experienced a major change in your life since you last updated everything (for example, you got a divorce or had a child).

5. Consider increasing your pension contributions

The maximum contribution the limit for 401 (k) s increases by $ 1,000 in 2022 compared to 2021, for a total of $ 20,500, or $ 27,000 for those 50 and over. If you have a plan through your employer and can afford it, try increasing your contributions to accommodate the new limits. Log into your account and increase your contribution rate to save more.

Even if you can’t maximize your 401 (k) or individual retirement account (the contribution limits for these accounts remain at $ 6,000 for 2022), see if there is a way to increase your contributions even by 1 % next year. It may not seem like much, but it will add up.

6. Allow time for a life audit

Finally, try something a little more fun. It was a subject of a previous newsletter, but if you haven’t already, take the time to do a Life Audit. During this process, you basically list all of your goals, short term and long term, on sticky notes.

It can help you think about your goals and re-prioritize what’s important to you – or at least, that’s what it does to me. Here’s a breakdown of how to do it.

Does the coming year look different to you, or have your goals changed over the past year? I would love to hear from you. Send me an email for the chance to be featured in an upcoming story.

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