October’s Financial To-Dos

Each month, we offer suggestions for ways to chip away at your financial goals. The idea is that by doing at least one thing each month, you can make significant progress.

This month we turn toward year-end planning. As we start the fourth quarter, now is the time to think about ending the year well.

Run a tax projection

While the tax code is complex, it shouldn’t be a mystery whether you will end up owing taxes or receiving a refund. If you wait until tax filing season to find out, you have very few options to make adjustments.

Our wealth advisors typically run tax projections for all our clients during or before the month of October. People tend to fall into three tax “personalities”:

Those who want to break even: “I don’t want to give the government an interest-free loan.”
Those who want to receive a refund: “It’s like a hidden savings account I don’t have to think about.”
Those who want to owe: “I want to use my money as long as I possibly can.”

If you don’t like the results of your tax projection, you’ll have a few months to take action.

Make a year-end spending plan

How often do you hear, “I can’t believe it’s Christmas time already!” It’s no surprise that December is a higher month for spending. From gifts and parties to donations, people tend to be more generous. December is also an inconvenient but common time for property and personal tax bills, and it can sometimes take a few months to get caught back up.

If you haven’t already worked the holiday season into your regular spending plan, start setting aside money for gifts and big expenses. The pleasure of spending money you have already set aside is so much better than the go-for-it-and-hope-for-the-best approach that many couples take.

Fill out your FAFSA

Starting October 1, the Free Application for Federal Student Aid (or “FAFSA”) form is available to be completed online at fafsa.ed.gov for college students applying for financial aid in the following school year.

In addition to applying for federal and state assistance, many colleges use the FAFSA to help them determine how much assistance the school will provide. Almost all families with students enrolling for this next school year will need to apply. The sooner you complete this, the better, since many schools and states have deadlines that fall well before the Federal due date.

As always, let your financial planner know if you’d like help with this during your regular quarterly meeting. That’s what we’re here for!

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