Can anyone remember Y2K just like me and thinking I can’t believe it is the year 2000? Well, before the blink of an eye we are now at 2015 and another new year to take stock of where you are financially and what moves you should make this year to improve your bottom line. Since there are so many financial items to watch as the CEO of your family finances, here are my five items to put on your financial list as moves to consider in 2015.
- Shop Your Bills– January is one of the best months to get on the phone and shop each and every one of your bills. One of the quickest ways to free up more disposable income to pay off debt or increase your savings is to gain back more cash flow in your family profit and loss statement. Remember, companies like to know that they have booked their recurring business for the year in January or lock down deals so they know what their cash flow will look like in 2015. Ask for the retention department and start with electricity, mobile phone, cable, landscaping, and then go right down the list.
- Real Estate While Rates Are Low– Rates are still extremely low for buying a primary residence or a rental property. The difference on a $250,000 mortgage from a 4% interest rate to a 5.5% interest rate on a 30 year note is over $80,000 of interest over the life of the loan. If it makes sense for your overall financial plan, real estate can still be a very smart move because it is unlikely that rates will stay low forever. A decade or so from now you may be thanking me from this article that you took the plunge to buy a piece of property. Remember, real estate is a long term asset class and do not buy something if you cannot manage it or don’t plan to hold it for the long term.
- Assess Your Tax Plan NOW– Why or why do people typically wait until December to start doing their tax planning. The new 2015 tax tables will be out and the first thing to do is to sit down and make sure you have the appropriate withholdings taken out from your paycheck at work. If you are a business owner, then it is time to sit down and calculate estimated tax payments. You should also consider what pre-tax options are available to you through work or at your business and determine what other nuances may affect your overall tax situation for 2015.
- Have A Garage Sale– My Spidey senses tell me that we have seen less of these in 2014. When times are going well, most families don’t resort to a garage sale unless they are moving. That is why it is exactly the time to have one now, especially when spring time comes in your neighborhood. Use an app like ‘square’ or another system so you can collect cash or charge and use the proceeds to save up for your holiday shopping or a well needed vacation for your family. You would be surprised how quickly you can raise a thousand dollars with a good garage sale.
- Don’t Let Your Cash Safely Lose Money– While I am a huge advocate of building up a cash reserve, interest rates at the bank aren’t climbing at all. It’s important to have 6 to 12 months of a cash reserve overall, but with the bank paying .25% or .50% and inflation growing at 2%+, all you are really doing is going backwards to inflation. With the ease of transferring money today, consider keeping a couple of months of cash reserve in the bank/credit union and opening up a brokerage account to look at something such as short term tax free bonds in your state. Talk to your Private CFO® about doing something like this.
For sure you’ll think about diet and exercise in the New Year, but money can sometimes take a back seat to the weekly weigh in on the scale. Start weighing yourself at least monthly to see if you are making progress against your goals, and use these five smart money move ideas to help your bottom line grow in 2015.