1. Examine Your Overall Financial Situation
If you changed jobs, sold a house or expanded your family, you might need to add new insurance policies, adopt a more ambitious savings policy or rebalance your long-term investments. Evaluate your college savings plans, life insurance policies and overall investment portfolio. Make sure you have diversified your investments.
2. Insurance Review
Sit down with your insurance professional. Ensure your beneficiary designations are up to date. It is important to review your insurance coverage each year. Make sure you have enough auto coverage and that your liability limits are sufficient. If you have substantial assets, this may be a good time to consider adding an umbrella policy to your insurance portfolio.
3. Charitable Contributions
This is a perfect time to finalize your charitable giving contributions. Help others celebrate their holiday season while teaching your own children the importance of giving. Furthermore, these donations will count toward your current year contributions for tax purposes if made before Dec. 31.
4. Use Your Bonus Income Wisely
Any bonus or additional income received during this period should be put to work to instead of splurged. Increase your emergency reserves. It is recommended that you have at least three to six months’ worth of expenses in the bank. Invest these funds in a liquid and safe investment. Alternatively, use these additional funds to pay down any consumer debt.
5. Making that Big Purchase
If you have planned, saved and prioritized a big purchase for this year, be sure to do your homework. Start shopping early, and make informed and rational decisions. Don’t forget to consider hidden expenses such as insurance, moving costs, fuel costs, etc. The holidays are a time when people get caught up in the excitement of the season and tend to make impulse purchases they later regret.
