What did you accomplish financially in 2019?
Before I jump into the to-dos, spend a minute reflecting on what you accomplished in 2019 financially and personally. For me, I paid off over $20,000 in student loan and auto debt. I upped my retirement savings and almost maxed out both my 401K and IRA. I got a raise and a promotion at work. I started this blog. We hosted the first pHERsonal Finance Day and almost 50 of you attended. It’s easy to focus on the things we did NOT achieve this year (I still have student loans, ack), but writing down the things that DID happen makes me realize I DID achieve a lot. Thanks to each of you who talked to me about rolling over an old 401K, investing some extra cash, or setting up a 529 plan that’s right for you and your little one. Excited to see what 2020 brings!
Here are three money to-dos that can make your 2020 start off with a little more change in your pockets.
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Can you squeeze a little more into your retirement accounts? In 2019, if you’re under 50, you can put a maximum of $6,000 into an IRA or Roth IRA (remember there are income limits to contribute directly to a Roth). You can put another $19,000 into a 401K. Didn’t quite hit these limits? If you’ve got some extra cash and can up your contributions do it now. You have until April 2020 to make your 2019 contributions to your IRA. Not so for the 401K. Already maxing out your 401k? What’s next?
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Did you use all the money in your Flexible Spending Account? You could contribute up to $2,700 to an FSA in 2019. While your Health Savings Account dollars do NOT expire, anything left in your FSA will go poof at the end of the year. It’s probably too late to snag a doctor appointment before the end of the year but you can stock up on sunscreen, contact solution, or prenatal vitamins. Check if an expense is eligible here. You can also make sure you have submitted all your eligible medical expenses you incurred in 2019.
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Did you get in all your college savings for 2019? If you want to maximize your state income tax deduction, make your contribution before the end of the year. Since 529 contributions are tax deductible in many states (read: New York, Massachusetts, and DC), putting some more money into college savings can save you on your 2019 state taxes. Use this calculator to identify your potential savings. As an example, if you live in DC where income is taxed at 8.5%, a married couple can save up to $680 on state taxes by contributing $8,000 to a 529 plan. Still need to set up a 529 and not worried about state income tax (e.g., because you live in a no income tax state like Texas or a state with no deduction like California?)? You can set up a 529 plan through CollegeBacker here.