October 21, 2016
Have you ever wondered, as you peered enviously over the hedge at the neighbor’s place, whether that shiny Beemer in the driveway and newly remodeled pool in the backyard are signs of a family sinking into debt or simply enjoying the fruits of financial good fortune?
Unless you’ve seen their bank account, you’ll probably never know, but if they are living within their means, there might be a method to explain the new toys: good budgeting.
Obviously, that means keeping a close eye on income and expenses as well as careful use of debt. It includes using a financial calendar, a monthly map of payments due, income anticipated and events to remember.
Whether you use financial software or old-fashioned ink on paper, keeping a financial calendar can be the backbone for a budgeting plan that helps you effectively manage money.
For an idea of some of the things you’ll want to include on your calendar, let’s take a month-by-month walk through the year. Some suggestions might help, and some might not apply to you, but certain things, like income tax deadlines, affect almost everyone.
The important dates will probably expand as you track your income and expenses. Dates will vary according to where you live, especially for items like state and local taxes, and homeowners or condo association dues, so this list doesn’t include those.
Obviously, this is a starting point. Your job will be tailoring the list to fit your personal deadlines.
- Though you should have begun working on this in the previous calendar year, set financial goals for the year and think about how you will deploy money to meet them. Decide how much you want to save for retirement in addition to understanding the amount withheld from your paycheck. If you’re planning on buying a big-ticket item, create a savings plan for that. Determine how large an emergency fund you’ll need to maintain – usually equal to six months income – and decide how much you’ll need to set aside each pay period to keep it fully funded.
- Soon after New Year’s Day, review your financial statements from the previous year and look for patterns. If you need to pay a semi-annual homeowners’ assessment in June, make sure you budget for it. Decide when you will pay for such items, and set a goal of paying a little earlier than the due date. Don’t forget insurance premiums and membership fees.
- Think about your 401(k) and other income-withholding plans. Did you get a raise that will allow you to contribute more?
- Remember important dates. If you pay estimated federal income taxes, the quarterly payment deadline — and the final one for the 2016 tax year — is January 17.
- If you plan to buy health insurance under the federal Affordable Care Act, January 31 is generally the deadline to enroll or make changes to coverage in 2017. Some exceptions apply, so visit the Healthcare.gov website for more information. Failing to meet the deadline could mean paying a tax penalty.
- Organize documents needed to prepare state and federal income taxes. Now is a good time to schedule an appointment with a tax preparer or to obtain tax-preparation software if you plan to do the job yourself.
- Start thinking about how to fund summer plans. Daydreaming about vacations can be a great antidote for the end-of-winter blues, but unless you begin looking for deals and setting aside money, the dreams might never become real. Begin looking at airfares and travel packages, and read travel articles for planning tips. Consider creating a stand-alone vacation savings account.
- If you are nearing retirement, considering scheduling an appointment with an investment expert to go over your finances. If you have an excess of debt, meeting with a credit counselor who might be a useful step.
- If you have a child going to college next year, become aware of state and federal deadlines for applying for student aid. Review procedures for student loans if those are part of the plan.
- Tax month. If you haven’t met with the tax preparer yet, do it immediately. If you’re preparing your own federal tax return, boot up the software and get to work. You should make sure you have all the W2s, 1099s and other income documents you need available. If you made donations or gave to charities, gather the receipts. Amass all the other relevant documents, including property tax statements and daycare receipts, needed for your return.
- File your income tax return by April 17 and include required payments. If you pay federal taxes quarterly, April 17 is also the deadline for the first payment of 2017. This date is also the deadline for filing an extension.
- April 17 is the deadline for 2016 contributions to your IRA and 529 savings plans. Review tax information for details.
- Think about how to spend your tax refund. Considering investing the money or using it to pay down debt.
- May is a good month for taking stock of your long-term financial issues. Do you have adequate insurance on your automobiles and real estate? Is your life insurance policy sufficient? Should you be putting more in your children’s college fund?
- Review deadlines for payments coming in the next several months. People often lose track of things during the summer when children are home and vacations are scheduled. Make sure you enter due dates in your calendar. If you think you might have a hard time remembering, consider setting up automatic payment schedules online.
- Time for a mid-year checkup on your finances. If you own stocks, review how they performed since January. If you added non-mortgage debts, consider steps to rebalance your spending so that you can pay them on time, or better, pay them off.
- Review your cash flow, making sure that inflows and outflows balance and that you’re meeting retirement savings goals. Consider using personal finance calculators online to help do this.
- If you pay estimated taxes, remember the June 15 deadline.
- June 30 is the deadline for federal student financial aid applications. If you have a child going to college, this is the cutoff date to apply for federal assistance.
- Review your finances if you’re planning a summer getaway. Do you have enough socked away to cover expenses? And think about how you’ll pay. If you have credit cards that offer cash-back bonuses for vacation spending, consider using them on the road. Check your frequent flyer miles if you have cards that offer those and consider using them if you’re flying.
- Start thinking about back-to-school expenses. If your state offers a sales-tax holiday for school-related purchases, find out when it is and plan part of your shopping around that period.
- Keep records of day-camp expenses for children. They might offer a tax deduction next year.
- If you’re home in August, go through the stuff piling up in your garage or storage locker. Sell what you don’t need on eBay or Craig’s List, or donate to charity. Make sure you get receipts if you donate. If you have a child going to college who no longer needs that beat up car he or she drove to high school, consider donating that as well – it could be a valuable deduction on next year’s tax return.
- Check your credit reports to make sure they reflect your economic behavior. Credit reports abnormalities can alert you to fraud, and they are important if you plan to borrow or establish a new credit line.
- The third-quarter estimated federal tax deadline is September 15.
- September is often a good month for car shopping as the last model year draws to an end. If you want to buy a new car, consider shopping online to get the best deal.
- Any modifications to a federal student financial-aid application must be filed by September 15.
- If you filed for an extension of the federal income tax deadline in April, October 17 is the deadline for completing your individual return.
- Consider creating an account for holiday shopping and set a deadline for making a budget for setting limits on what you will spend. Look for ways to save money on holiday expenses.
- If you’re eligible for a Medicare Part D prescription-drug plan or Advantage Plan for 2018, to open enrollment period begins October 15 and ends December 7.
- Employees might also have an open-enrollment period for 2018 health coverage this month. If so, compare plans and consider whether a change in cost or personal circumstances might make sense. If a dental plan is an option, consider whether you ought to take it.
- The federal and state exchanges will probably begin 2018 enrollment for health insurance coverage under the Affordable Care Act this month. Visit the Healthcare.gov website for details if you are interested in individual coverage.
- Review any balances that you have on healthcare, childcare and senior care flexible spending accounts. These accounts are generally tax free if they are used in accordance with the federal tax code. Check out rules that apply to when the money must be spent and how much you might be able to carry over into 2018.
- Consider your tax withholding needs for 2018, review employer withholding of retirement savings and file a new W-4 form with your employer if needed.
- Time to review your 2017 expenses. Compare your financial statements to your own records and make notes on where spending exceeded or fell short of your budget. Use that information when planning a 2018 budget,
- If you have stocks, bonds, mutual funds or exchange-traded funds, review your investments and consider if you want to make changes. This is the last month of the year, so you might consider moves that would have tax consequences for your 2017 tax returns.
- If you are older than 70 ½, remember to take required annual minimum withdrawals on your IRA and employer retirement accounts by the end of the month.
- Consider making charitable contributions, which must be made by the end of the month to qualify for a deduction on your 2017 tax return.
- NA, ND. Annual Personal Finance Calendar. Retrieved from: https://www.northshorebank.com/about-us/connecting-with-you/march-2016/annual-personal-finance-calculator.aspx
- O’Neill, B. (2014, January). An Annual Financial Calendar: Key Action Steps. Retrieved from: https://njaes.rutgers.edu/sshw/message/message.asp?p=Finance&m=256
- Sheedy, R. (2016, January). 15 Deadlines Retirees Can’t Afford to Miss in 2016. Retrieved from: http://www.kiplinger.com/article/retirement/T037-C000-S004-a-retiree-guide-to-key-dates-in-2016.html