The holiday season is in full swing, and we have news that there will soon be an effective vaccine for Covid19. With so much going on in our lives, it is easy to overlook several of the important financial dates for this month, so here’s a reminder.
- December 31– Last day to take required minimum distributions for your IRA, 401(k) and inherited IRAs. One exception: if it’s your first RMD, which must be taken by April 1 following the calendar year during which you turn 70 ½.
- December 31: Deadline to set up most types of retirement accounts so that eligible contributions count toward the current year.
Create a Budget and Track Expenses
December is a good month to review expenses for the year, which can help with planning your budget for 2021. Since 2020 was an unusual year due to the Covid19 pandemic, it will be important to factor its impact on your finances for next year.
For instance, do you plan to budget for a vacation in 2021 or will you wait for a later time? Maybe you found yourself tapping your emergency or savings accounts during this year. If so, it will be important to replace those funds when you are able to do so.
Creating a budget is important in order to maintain overall control of income and expenses. From spreadsheets, paper and pen to mobile apps, there are many ways track spending. Finding the method that works best for you is important to ensure your success and provide you with the peace of mind that comes when your finances are in order.
