In just a few weeks, 2009 will be behind us—and likely your checkbook will be happy to see it go. But before the holiday madness ensues, take a little time to prep your pocketbook for a richer 2010.
Between layoffs, furloughs, budget cuts, and regular bank implosions, 2009 frankly sucked. Many people—myself included—closed their eyes, stuck their fingers in their ears and chanted "la la la" all year when it came to checking in on plummeting investment values and income. But, for better or worse, December is the time to take a deep breath and assess how you did this past year, set yourself up for some tax savings in April, and recharge your savings and retirement plans.
Here are a few good money moves to make before you ring in the New Year.
Set up or review your automatic savings plans. Even if your income took a hit this year and expenses went up, there are still ways you can find an extra few bucks per month or week to sock away in a savings account. Instead of relying on your pea-brain to remember to do this by hand, opt into a set-it-and-forget it automatic savings plan. If you did automatic savings deposits in 2009 already, look hard at the number. Did you save as much as you wanted? Did you need to adjust it down? Did you stop the plan halfway through the year in a panic? Restart your automatic savings plan for 2010. Even $25 a week is better than nothing.
Max out your retirement savings. If you're lucky to 1.) have a job and 2.) have it at a company that matches your retirement plan contributions, congratulations. Everyone else wants to kick you in the shins, especially if you're not taking advantage of it. Employer retirement contribution matches is free money that you can only get your hands on if you're making the initial contribution. In the spirit of "pay yourself first," make sure you're putting away the maximum amount you can possibly stand into retirement, and take advantage of the tax benefits and employer matches that comes along with that. Even if you're self-employed, you're still going to retire at some point, so make sure you've got yourself a plan in place. How much you should save for retirement has everything to do with your current age, when you want to retire, and the type of lifestyle you want to live when that happens. Retirement calculators abound online; here's SmartMoney.com's retirement worksheet.
Get your last tax deductions in. If you think things were bad for you this year, they were worse for charities. When people pinch pennies, charitable donations are the first things to go down. But you can still save money on your 2009 tax return by donating stuff and cash to the charity of your choice by the end of this year. Likewise, if there are work-related purchases that you can write off—go to town. Just make sure you're hanging onto your receipts and are ready to itemize come April.
Get your 2009 free credit report. Every year you're entitled to a free credit report from the three major reporting agencies, and if you haven't snagged your 2009 report, now's the time to do it. Don't listen to the URL that the guy in the commercial is singing about; the one you want is Annual Credit Report. This report doesn't include your FICO score, the credit rating that has a whole lot to do with whether or not you can get a mortgage. If buying a house is something that may happen in 2010 or beyond, it's worth spending the $30 or so to check your FICO score.
Jot down your accomplishments at the office this year. You won't find this advice in many money magazines, but what you did this year at work will have a lot to do with how much income you pull in in the future. When things get better for your company and raises are (finally) doled out, you want to make the case to your boss or manager that you deserve more money. Best way to do this: write down all the things you accomplished at work in 2009 that you're proud of. When it's time for the performance review, your ability to instantly recall all the reasons why you're the employee your company should reward will affect the size of your next paycheck adjustment. If you decide to move onto a new job? With your accomplishments written down, putting together your resume will be easy.
Calculate your net worth and get a 2010 budget set up. If setting up personal finance software like Quicken or Mint has been on your to-do list, now's the time to pull the trigger. January is the perfect time to start tracking your money like you always intended, and personal finance software makes it very easy to monitor your net worth and keep a budget. If the idea of fighting with Quicken or Microsoft Money makes you want to run the other way, try out a simpler, automated web-based money tracker like Mint. (Here's more on why I stopped being paranoid and started using Mint.)
Get your will and insurance ducks in a row. December is also the right time to review your insurance policies and will. Did you move this year and forget to change your renter's insurance information? Is your car insurance plan up to date? Are you using the best healthcare option your employer offers? This grown-up paperwork is rarely fun, but it matters a whole lot if things go wrong—and having it in order will help you sleep at night.
Of course, if you need specific help reviewing investments or making important decisions about your will or retirement plan, be sure to check in with a professional financial planner (which I am not). What else are you doing this December to get ready to grow your money in 2010? Let us know in the comments.
Gina Trapani, Lifehacker's founding editor, looks forward to seeing less red and more black in 2010. Find her at Smarterware and on Twitter.