Fall Financial To-Do List

Kip Tips

Fall Financial To-Do List

Make these moves before the end of the year and reap the rewards.

My husband is a to-do list fanatic. He makes lists for his daily tasks, for home repairs that need to be done, for things that need to be packed for trips -- for everything. And he insists that I do the same. Otherwise, he says, I'll never remember everything I have to do because I have so much going on in my life.

Admittedly, I'm not as diligent about it as he is. But when I make the effort, I reap the rewards: better organization, less stress and a sense of accomplishment because I get things done that I've neglected (or forgotten) to do.

I'm sure plenty of you are just as busy as I am. So I took the liberty of crafting a to-do list of things you should tackle this fall to improve your financial situation. Reap the rewards as you mark each item off the list.

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1.Review your health-insurance options. In October or November, most employees will be given a chance during open-enrollment season to make decisions about their health insurance benefits for 2011. Be sure to look closely at your options because employers will be making some changes to their plans as a result of health-care reform. See Health Insurance Changes for 2011 for more information.


2. Boost your flexible-spending account contribution for 2011. If your employer is increasing deductibles and co-payments for your health insurance, as many are, then it’s a good idea to put more money into your flexible spending account. An FSA lets you set aside pretax money that you can use tax-free for medical expenses.There is no maximum contribution amount for medical FSAs, although many employers limit contributions to $4,000 or $5,000 per year. Starting in 2013, the health-care-reform law caps annual FSA contributions at $2,500 per year.

3. Sign up for bank account alerts. Now that banks can no longer charge overdraft fees on debit-card transactions (unless you opted into overdraft protection), it's imperative to keep close tabs on your balance so your purchases aren't declined for insufficient funds. An easy way to do this is to sign up for your bank's balance alerts. See An Easy Way to Avoid Overdrafts to learn more.

4. Make tax-saving home improvements. The tax credit for energy-efficient home improvements expires at the end of 2010. If you have a furnace, windows, water heater, air-conditioning system or other items that need to be replaced, do it before the end of the year. See Tax Credits for Going Green to learn more about the credit and which improvements qualify for it. And see Everything You Need to Know About Replacement Windows.

5.Convert to a Roth IRA. If you've been trying to decide whether to convert your traditional IRA to a Roth, make up your mind soon so you can take advantage of a tax break. If you convert to a Roth in 2010, you're entitled to extra time to pay the tax bill on the converted amount. Although you will be taxed on the entire amount you convert, you can spread the bill over the next two years, reporting half of the conversion on your 2011 tax return (due in April 2012) and the balance on your 2012 return (due in April 2013). See our special report on Roth conversions to learn more.


6. Undo a Roth. Say you converted a traditional IRA to a Roth in 2009 and paid taxes on the amount you converted. Then your account balance fell. You have until October 15 to undo that conversion to wipe out that tax bill. Then you can reconvert the account after 30 days back to a Roth and pay taxes on the shrunken balance. See Act Soon to Undo a Roth Conversion.

7. Boost 401(k) contributions. If you're in a position to contribute the maximum to your 401(k) this year ($16,500), go for it. If you're 50 or older, you can contribute up to $22,000. While you're increasing your retirement account balance, you'll also be lowering your taxable income. Use our tool to see the power of boosting your 401(k) contributions. Also see Fix Your 401(k) to learn more about how much of your salary you should be putting away.

8. Set up a solo 401(k) by the end of the year if you're self-employed to lower your taxable income. You can contribute up to $16,500 plus another 20% of your self-employment income (defined as total business income minus half of your self-employment tax) -- or 25% of your compensation if your business is incorporated -- for a maximum of $49,000. See Retirement Plans for the Self-Employed for more information.

9.Clean out your closets and donate what you don't need. If you itemize on your tax return, take all that stuff to Goodwill or any other charitable organization and claim a deduction for your contribution. See The Financial Benefits of Decluttering.

10. Draft a holiday budget and start setting aside money now. You can avoid going into debt this holiday season if you start saving now. Here are six simple ways to find extra money in your budget and save $1,000 by the holidays.

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