![]() ![]() Next, roll over 401(k)s from old jobs and IRAs at different firms into one account at a low-cost brokerage or mutual fund company-it's easier to keep track of this way, and you'll save on maintenance fees. That's how long the IRS has to challenge your reported income. If you're self-employed or have income from multiple sources, hold on to your documents for six years. Anything from before 2007 should get shredded. You should keep a copy of your tax return indefinitely, but you need to save supporting documents for only three years. Make time to toss any outdated paperwork. If you're entitled to a refund, you will receive it that much sooner.Ħ money matters to stop worrying about right now If you're surprised by a tax bill, you have time to figure out a payment strategy. You've still got two months, but handling this task early has major benefits. You should have received all documents necessary-your W-2, 1098 (if you have a mortgage), and 1099s-to complete your taxes. How to build an emergency savings fundĪre you turning down money from your boss? Timely Tip: If you or your child will be attending college this fall, submit your Free Application for Federal Student Aid (FAFSA) form ASAP, using estimates of your 2010 taxes. Then make funding your individual retirement account (IRA) automatic as well by linking it to your checking account. Already enrolled? Make sure you're contributing enough to qualify for the maximum company match, and if you're not, boost your contribution rate by one percentage point each year until you're eligible for the maximum match. If your employer matches employee contributions to a 401(k), sign up now. Search online for the highest-yielding bank or credit union savings account after you've opened one, set up monthly deposits from your checking account. Building security requires a commitment to saving, and the easiest way to save is with an automatic transfer. No one's ever achieved financial fitness with a January resolution that's abandoned by February. Here's my plan of attack for the year to come: (Do your taxes two months early? You're just trying to stay on top of today.) But I promise that if you set aside time each month to give your money some attention, when next year rolls around you'll be in fabulous financial shape. Thoughtful financial planning can easily take a backseat to daily life. Making these cuts will help you to follow the suggested budget by Suze Orman.If you make time each month to give your money some attention, you'll start the next year in fabulous financial shape. You may want to skip a new outfit or that concert until you have saved up at least a six month emergency fund. Many of these categories can take the biggest hit right now. This means the amount you spend on your groceries, clothes, gifts and entertainment. At the very least, make a list of things that you should cancel if you were to lose your job.įinally, look at your discretionary spending and cut back. ![]() Additionally, look at cutting back your cable and for ways to reduce your utilities. Do you actually use your gym membership? If you don’t, you may want to get rid of it. Look at the ways that you can reduce these bills. This would include gym memberships, utility bills, cable and any other monthly expenses that you have. Trading down in car, refinancing your mortgage for a lower interest rate or selling items in order to get rid of your debt can help. You may not be able to reduce these bills, but if they take up a large portion of your salary you may need to do everything you can to reduce your payments now before you lose a job. This will include your mortgage, your utilities, your debt payments as well as the spending that you normally do.įirst look at your fixed bills, such as your mortgage and other debt payments. In order to reduce your spending, you should start by listing your normal expenses. This budget by Suze Orman can help you stay on top of your finances.īut how do you start living on half of your income now? It sounds as though you need to begin cutting your expenses drastically in order to follow this budget by Suze Orman. You can quickly build your nest egg, but you are also reducing your expenses now. She thinks that this will better prepare you to deal with a job loss in the future. In a recent episode of Oprah, Suze Orman advised people to begin living on one half of their income, and putting the rest into a savings account. ![]()
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