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Fail-Proof Your New Year's Resolutions

FailProof Your New Years Resolutions imageNew Year’s resolutions get a bad rap — and for good reason. They are wildly unsuccessful. Millions of people have well-intentioned aspirations for the new year, but only about one in 10 actually accomplish their goal, according to the Statistic Brain Research Center.

If you dig a little deeper into the reasons why they fail, you find it’s usually not the resolution itself, it’s in the execution. Here are four popular New Year’s resolutions and how to avoid messing them up:

  1. Resolution #1: Becoming healthier. The most popular resolution can take on many forms — losing weight, getting in better shape, eating healthier, and so on. This resolution usually fails because to be successful, it takes a major lifestyle change. You’re fighting against months or maybe years of poor behaviors, so expecting wholesale changes right out of the gate is not reasonable.

    Make it fail-proof: Start with smaller, simpler goals like not eating after 8 p.m., or exercising for 20 minutes a day for three times a week. Hitting manageable goals will build momentum and create good habits.
  2. Resolution #2: Spending less money. Depending on how much you spent on Christmas, this one might take care of itself for a few weeks. But if you don’t have a spending plan or budget, old spending habits will re-emerge.

    Make it fail-proof: Take some time at the beginning of the year to jot down some long-term spending and savings goals and then work backwards to figure out how those goals will affect your weekly purchases. As the year goes on, continue to track your progress and evaluate your purchases.
  3. Resolution #3: Getting more organized. Going from being disorganized to organized is not a quick fix. To make the switch, it takes an evaluation of your entire environment. Most people don’t have the time for such an extensive process so they buy some bins, stuff them full and call it good. That’s not going to work and it'll cost you money.

    Make it fail-proof: Instead, start small. Pick one room in your house or one aspect of your life to focus on, like health care bills or your tax documents. Once you get some traction, you can apply the methods you learned to other things. Incremental improvement is the best long-term approach.
  4. Resolution #4: Spending less time on electronics. If this is a resolution that’s important to you, odds are you’ve had some trouble keeping electronic usage under control. With so many games, social media and streaming options at our fingertips, our brains are now conditioned to be engaged electronically at all times.

    Make it fail-proof: One way to start to break this habit is to change the accessibility you have to your devices. Remove apps from your phone and keep your devices out of reach when you don’t need them. Another way to curb electronic usage is to form a different habit, such as reading.

Resolutions, whether at New Year’s or any other time, are a good thing. To be successful, more planning and attention are required than most people think. And if you slip up, don’t quit! Learn from your mistakes and keeping going.

There's Still Time to Fund Your IRA

There is still time to make a contribution to a traditional IRA or Roth IRA for the 2019 tax year. The annual contribution limit is $6,000 or $7,000 if you are age 50 or over.

Prior to making a contribution, if you (or your spouse) are an active participant in an employer's qualified retirement plan (a 401(k), for example), you will need to make sure your modified adjusted gross income (MAGI) does not exceed certain thresholds. There are also income limits to qualify to make Roth IRA contributions.

Maximum 2019 IRA Contribution amounts: $6,000 or $7,000 (with age 50+ catch-up provision)

Theres Still Time to Fund Your IRA image

Note: Married traditional IRA limits depend on whether either you, your spouse or both of you participate in a qualified employer-provided retirement plan. If married filing separate and either spouse participates in an employer's qualified plan, the income phaseout to contribute is $0-10,000.

If your income is too high to take advantage of these IRAs you can always make a non-deductible contribution to an IRA. While the contributions are not tax-deferred, the earnings are not taxed until they are withdrawn.

The Power of Cultivating Gratitude
 
Tips on how to be thankful

It costs nothing to say thank you. Yet cultivating gratitude in your life may be one of the most rewarding moves you can make. Not only does it invoke warm fuzzies in everyone involved, expressing your appreciation may actually improve your health and well-being.

A landmark study by gratitude researcher Robert A. Emmons has shown that gratitude can reduce physical illness symptoms and toxic emotions. It can even help you sleep better and longer, according to a study published in Applied Psychology: Health and Well-Being.

So what are some ways you can make gratitude part of your everyday life? Here are a few tips to help you get started:

  • Write it out. Write out what you’re thankful for in your life. This may mean making a nightly habit of writing in a journal or jotting down a message to a loved one and giving it to them. You could also make some sticky note reminders of what you’re grateful for and hang them on your mirror to read each morning.
  • Share a good memory. Reminiscing often stirs up feelings of gratitude. For instance, think about the time you first met a close friend in grade school. Contact them and tell them how grateful you are that it happened. Send a photo of that family vacation when you all shared a common experience like learning to water ski. When you think about it, you will quickly discover happy memories to share with loved ones.
  • Offer your service. Show your gratitude through your actions. If you appreciate your community, join a group to clean up the park and streets. Provide a positive online review for your favorite local café. Or volunteer at a Veterans Affairs hospital.
  • Lend an ear. Some of the most meaningful moments involve simply being heard. Return the favor. If your sister is usually the one who lets you ramble on about work grievances and family drama, it’s time to give her a turn. Let her know you’re there and ready to listen. Maybe you avoid your chatty (albeit helpful) coworker. When you see them next, give them 5 minutes of your time.
  • Pay it forward. Did your neighbor share a gutter-cleaning hack with you? Next time you see someone on your street cleaning their gutters, offer to lend a hand. See a mom digging for spare change at a check out register? Pay it for her. Let the appreciation of your good deed change someone else’s outlook for the day. When they offer to pay you back, just tell them to pay it forward.

There are opportunities to cultivate gratitude all around us. Refocusing on what you appreciate on regular basis can help you live a healthier, more satisfying life.

 Save Money with These Year-End Ideas

There's still time to reduce your potential tax obligation and save money this year (and next). Here are some ideas to consider:

  • Estimate your 2019 and 2020 taxable income. With these estimates you can determine which year receives the greatest benefit from a reduction in income. By understanding what the tax rate will be for your next dollar earned, you can understand the tax benefit of reducing income this year AND next year.
  • Fund tax-deferred retirement accounts. An easy way to reduce your taxable income is to fully fund retirement accounts that have tax-deferred status. The most common accounts are 401(k)s, 403(b)s and various IRAs (traditional, SEP and SIMPLE).
  • Take your required minimum distributions (RMDs). If you are 70½ or older, you need to take required RMDs from your retirement accounts by Dec. 31. Don't forget to make all RMDs because the fines are hefty if you don't — 50 percent of the amount you should have withdrawn.

    Keep in mind, even if you don't have RMDs yet, removing a planned amount from your retirement accounts each year may be more tax efficient than waiting until you are required to do so.
  • Manage your gains and losses. Rebalance your investment portfolio, and take any final investment gains and losses. When you have more losses than gains, up to $3,000 can be used to reduce your ordinary income. With careful planning, you can take advantage of this loss amount each year.
  • Finalize your gift-giving strategy. Each year you may gift up to $15,000 without tax reporting consequences to as many individuals as you choose. Consider any gift-giving you wish to make up to the annual limit. This could include gifts of cash or property, and investments.
  • Donate to charities. Consider making end-of-year donations to eligible charities. Donations of property in good or better condition and your charitable mileage are also deductible. Receiving proper documentation that acknowledges your contributions is important to ensure you obtain the full deduction. Have a plan by knowing your total deductions for the year to help you decide how much and when to donate. Pulling some donations planned for 2020 into 2019 may be a good strategy.
  • Review your automated billing transactions. This is a good time to identify what automatic monthly expenses should be reviewed for reduction or elimination. You may also discover billing for services you thought were canceled. This specific review often catches errors that a simple account reconciliation may be missing.
  • Organize records now. Start collecting and organizing your tax records to avoid the scramble come tax season.
  • Develop your own list. Use these ideas as a jumping off point to create your own list of annual review items. It might also include reviewing college savings accounts, beneficiaries, insurance needs, wills, and going through an aging parent's financial accounts.

Questions about the most effective money-saving moves for your situation? Call today.