The holiday season has arrived, and if you’re anything like us, you’re dealing with a hefty dose of stress and an even bigger to-do list than usual. So the last thing you need is to add an angst-inducing chat about money, right?
Sure, facing your finances can be daunting — especially during the holiday spending frenzy — but it’s crucial to have some important discussions at home and at work before December 31.
This will help you make sure you’re tying up any financial loose ends and setting your money up well for the new year, explains Megan Ford, a licensed marriage therapist and president-elect of the Financial Therapy Association.
The good news?
These money talks don’t have to add to your stress if you approach them the right way, Ford says.
1. Talk Raises and Goals With Your Boss
Now is an ideal time to check in with your boss about a few key topics — including your compensation, says Amy Swift Crosby, founder of entrepreneurial network SMARTY.
Before you brave this conversation, be prepared to show how much you’ve already done in your role and, even more important, to express how much more you want to do. So many people go to their bosses or clients and want more before truly taking ownership of their work and understanding the overall company goals, Swift Crosby says.
Her advice: Start with a discussion about the company’s big picture objectives — particularly those for the new year — which you can get a jump on now.
Specifically, ask where the company is headed and where your boss thinks you can best help. “You might talk about what skills you can develop to better meet those company goals, and if you can attend professional development conferences, workshops or retreats that would bolster those skills," Swift Crosby says.
Doing so can help you gauge where your manager sees areas for improvement, plus you can get a better sense of his or her timeline on raises, promotions and perks for next year.
2. Talk Savings and Spending With Your Spouse
In an ideal world, you and your other half sit down to discuss your finances on a regular basis. In reality, you probably opt for dinner and a Netflix binge instead of combing through credit card statements. That’s OK, but it also means you’ll have to work in this money talk amid the hectic holiday time, Ford says.
“The end of the year is a great time to check in with each other about how you’re tracking on big goals, such as retirement or saving for that family vacation you want to take next year,” she says.
It’s also a great time to look at how much money you both have left in your health care Flexible Spending Account and then hatch a plan to spend it. Finally, you’ll want to review and update the beneficiary info on any life insurance policies and investment accounts.
To get your money conversation going, Ford suggests starting by naming how much you’ve accomplished financially this year and really celebrate that.
Another tactic: Begin your chat with what you see as the happy result of your saving and financial planning, and then discuss where you have room for improvement.
3. Talk Goals With Your Financial Adviser
Once you have a clear picture of where you stand at work and with your partner, it’s a good idea to talk to your financial adviser to see if you’re forgetting anything — and to ensure your current financial plans align with your larger goals, says Dorie Fain, CFP®, founder of &Wealth, a boutique financial advisory firm.
At the end of the year, Fain tells her clients to look at where they may have fallen short on their goals. "We look into why and adjust to help make things more achievable and come up with a plan to course-correct."
If you’ve gotten a year-end bonus, now is the time to discuss it with your financial adviser to figure out the smartest way to invest it.
Then, it may be time to set some new financial goals for the year ahead. For example, do you need to recalibrate your budget to be more realistic? Or do you need to account for a new savings goal, like starting your baby’s college fund or trying to make up for lost retirement savings that you missed in your 20s?
Also, if you’ve gotten a year-end bonus, now is the time to discuss it with your financial adviser to figure out the smartest way to invest it.
4. Talk Taxes With Your CPA
Most people wait until April 15 is looming to discuss their taxes with an accountant. But connecting with him or her now can help you make some end-of-year tax-cutting moves that can positively impact your finances, says Gail Rosen, a certified public accountant (CPA) in Martinsville, New Jersey.
“Before the end of the year, do a quick projection about what your tax return will look like in the spring,” suggests Rosen. “Knowing where you stand can prompt you to make year-end tax-cutting moves, such as making end-of-year retirement contributions that can lower your income for this past year, or making charitable donations that you can include on your deductions.”
It’s also a good time to make sure you’ve paid enough taxes throughout the year, as paying too little could mean owing a penalty.
If you’ve had capital gains this year, consider selling stocks that have been flops to offset those gains with losses, Rosen advises. In this situation, you’ll want to work with your accountant and your financial planner to make sure you’re making the right moves.
Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.