Here are three dimensions of your financial life that you should take time to review. Some have key deadlines; others can be addressed any time of year.
Create or update your budget. A budget is a plan to manage how you spend your money. It doesn't have to be difficult; there are a wide variety of budgeting tools available online. If you are an Old National Online Banking user, you can take advantage of our Money Management tool, which allows you to see all your financial accounts in one place - including those at other financial institutions. With a budget in place, you'll be able to plan ahead for expenses and be more likely to achieve your savings goals.
Review your credit report. Reviewing these reports on a regular basis is a smart financial decision. This is the information that banks and lenders use when determining whether you qualify for loans and at what interest rates. Under federal law you are entitled to a free copy of each of your three credit reports once a year. You can access these free copies at www.annualcreditreport.com.
Check your FSA balance. Flexible spending accounts (FSA) allow you to set aside money from your regular paycheck to pay for out-of-pocket medical or dependent care expenses. The bigger financial benefit is that those dollars in your flexible spending account are considered pre-tax dollars. This means that they reduce the amount of income you'll have to report to the IRS. At the same time, these accounts come with a provision that requires you to spend all of the money deposited before the end of the year or risk losing any unspent funds. Some employers do offer plans that provide more time to use your money. The key is to know the deadline for your plan and make sure to use funds before the "lose it" rule kicks in.
Check your tax withholding. Whenever you start a new job, you fill out a W4 form to let your employer know the appropriate amount of money to withhold from your paycheck for federal income taxes. If you have been in your job for a few years or your family situation has changed, it may be a good time to take a look at your deductions and make adjustments if necessary.
Make the most of charitable gifts. Not only can you do good by supporting the organizations and causes that are important to you, those contributions may reduce your taxable income. Be sure to keep record of the contribution, which may include canceled checks, bank or credit card statements, or written communication from the charity. However, only donations to eligible organizations are tax-deductible. You should discuss with your own tax, legal and accounting advisors.
Maximize your retirement account contributions. The annual IRA contribution limit for 2020 is $6,000, or $7,000 if you’re age 50 or older. The deadline to open and contribute to a traditional IRA is Tax Day of the next year. The benefit of tax-deferred investments like 401(k) plans, 403(b) plans and traditional IRAs is that you don't pay taxes until you withdraw the money.
Schedule a meeting with your financial advisor. Managing your retirement funds does not have to be complicated. You can either do it yourself or work with a financial advisor. The key to having someone else manage your retirement funds is to find the right professional for the job. The best financial planners will listen to you, take your individual needs into account and help you make informed investment decisions.
Want an organized overview of your finances?
View all of your accounts, including those with other financial institutions, in one convenient location! Money Management makes it is easy to track your budget, set goals, monitor transactions and categorize your spending. Best of all, it’s part of Old National’s Online Banking, giving you complete control of your financial life, wherever you are!
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