Advice on How to Build Wealth with an Extra 24 Hours
By Paul Jarvis, CFP®
Area voices Financial Planning Blog
For those of you who lament that you never have enough time, Leap Year provides a welcome 24 additional hours. Before settling down to catch up on TV, consider using the extra time to take inventory of your personal finances.
Some of the most popular New Year’s resolutions are to get organized and to spend less and save more. Use this extra day to stay or get back on track, especially when it comes to your financial life.
Here are some simple steps you can take this Leap Day to ensure your financial house is in order.
Review your taxes. Spend an hour or two reviewing key tax provisions. Determine your applicable tax rates, or whether certain income streams such as Social Security or investment income are subject to extra taxes, in order to make simple and strategic tax moves that really pay off.
Set up automatic savings account transfers. Building an emergency savings account is crucial to financially stability. You’ll have funds for an unexpected expense rather than resorting to high interest credit cards. Arrange for a portion of your paycheck to be sent directly to a savings account, saving you time and money in the long run.
Plan your summer vacation. Use your extra day to plan out the details of a summer getaway. Last-minute plans can cost money, so get specific now about where you want to go, where you will stay, and how you will get there.
Review your menu of employee benefits. Don’t wait for the open enrollment deadline to review employee benefit options. Doing some number crunching early on, either by yourself or with the assistance of a CFP® professional, will help ensure you select the option that best fits your needs, budget, or tax situation.
Practice being retired. Use this Leap Day to test out your retirement lifestyle. By thinking about how you’ll spend your time, you’ll gain insight into your future spending habits, and in turn, how you may need to adjust your savings and investment strategies.