A financial checklist for the start of the year
WASHINGTON - It's the start of a new year: A time when you might be brimming with ambitions to be the healthier, smarter and more productive version of yourself you know you can be.
Funneling that positive energy can be a way to introduce new financial habits, even if they don't all stick, financial advisers say. Here are some tasks you can tackle this month to help you move toward a healthier financial life:
File your tax return
The tax-filing season launches officially on Jan. 19, the day the IRS will start accepting tax returns. Filing early not only helps taxpayers get their tax refunds as quickly as possible, but it's also a taxpayer's best defense against tax-related identity theft, when criminals file phony tax returns to claim a lucrative refund in your name. Taxes are due April 18 this year so preparing your tax return early also gives you more time - about three months - to save up to pay your tax bill if you owe, says Melissa Labant, director of tax advocacy for the American Institute of CPAs.
Shop for health insurance
About 2 million people who were insured through the federal insurance exchanges last year were automatically re-enrolled into those plans last month by HealthCare.gov after they did not choose new plans for this year, according to Washington Post reporter Amy Goldstein. But with health insurance premiums for plans sold on the federal exchange increasing by an average 7.5 percent this year, failing to shop around can cost you. Consumers who were automatically signed up for plans have until the end of the month to change plans or withdraw their coverage altogether.
Contribute to an IRA
The vast majority of savers who use individual retirement accounts wait until days before the April deadline to make their contributions. (You have until the April 18 tax deadline to make contributions to an IRA that can be deducted on your 2015 tax return.) But financial advisers say it makes more financial sense to make your IRA contribution at the beginning of the year, giving your cash more time to grow in the tax-deferred account. If you have the savings, you can make contributions for both this year and for last year at the same time. Individuals can contribute up to $5,500 into an IRA each year.
Create a plan for your debt
When the Federal Reserve raised short-term interest rates in December, it affected the prime interest rate that banks use to set rates on credit cards and other loans. With officials expected to roll out further increases this year, carrying credit-card debt and holding other types of loans could become more expensive, says Ken Hevert, senior vice president of retirement products for Fidelity. That makes it more important to come up with a plan for paying off those loans, Hevert says, especially on credit cards charging more than 20 percent in interest. Consider using part of your bonus or tax refund to help make progress.
Resolve to get fit - on the cheap
Retailers know this is the time of year when consumers are most motivated to slim down, and they're rolling out more promotions to encourage people to spend on those often failed ambitions. The deals available in January on treadmills, ellipticals and other workout equipment are comparable to what you might find on Black Friday, and better than what you'll see in the coming months, says Benjamin Glaser, features editor with DealNews. Wal-Mart, Sears and Dick's Sporting Goods are among those offering discounts of 20 percent, 40 percent or more on workout machines. Likewise, this is the time of year when gyms are more likely to waive signup fees and offer promotions for new members, Glaser says. Still, keep in mind that many gyms offering those discounts are betting you won't ever show up, so take a moment to think it through before you get locked into a contract.