Despite the weather indicating otherwise these past few weeks, spring just around the corner. While we continue to wait things out just a bit longer, there’s no better time to brush up on your money know-how. Here are five ways to improve your finances in March.
LOWER YOUR TAXES
While there are a number of reasons to file your taxes early, you still have some time until the April 15 deadline. That means there’s also more time to lower your taxable income, which you can do in a few different ways. For instance, if you choose to contribute to an IRA, you can invest up to $6,000 ($7,000 if you’re 50 or older) and still deduct the contribution for the 2020 tax year. Or, if you started a side gig or began freelancing this past year, you may be familiar with another retirement savings option, known as a SEP-IRA, which allows you to save 25 percent or $57,000 of your income — whichever is less.
If you have a high-deductible health plan, another trick for trimming your tax bill is to contribute to an HSA. For 2020, you can save up to $3,550 ($7,100 for a family plan) to help cover any medical expenses. If you’re 55 or older, you can tack on another $1,000.
PREPARE FOR HOMEBUYING SEASON
The start of spring means peak homebuying season is upon us. But with social distancing still in effect, nontraditional showings may be the name of the game — these tips for a virtual home tour can help you prepare. And with low interest rates holding strong, you may be curious about how to refinance your mortgage — this woman was surprised to learn a few things when she tried to do it.
GIVE YOUR HOME SOME LOVE
Even if you’re not in the market to buy a home, there are still some things you can do to ensure your abode is taken care of. For example, while you probably have homeowners insurance in place, you may want to consider supplemental homeowners insurance in case of an emergency. And if you've got spring cleaning on your mind, tackle a couple of home improvements and/or home maintenance projects, which can help boost your home’s value.
KEEP TABS ON YOUR STUDENT LOANS
Last March, the Department of Education placed a temporary moratorium on federal student loans, and that forbearance period has since been extended through September 30, 2021. This means that your monthly loan payments are currently suspended and won’t accrue interest.
While it’s great to have a bit of breathing room, if you can afford to continue paying at least the minimum on your loans, remember that any payments you make will go toward your principal. And if you really want to get ahead, consider revisiting if your overall strategy to pay down your student loans makes sense with your other financial goals — a financial advisor can help with this.
LOOK AHEAD FINANCIALLY
In just a few weeks we’ll be turning the clocks forward. So in the spirit of springing ahead, why not do the same with your finances? While this checklist focused on financially savvy moves to make during the month of March, our 2021 financial checklist can help you build good financial habits to carry you through the rest of the year — whatever that ends up looking like.
This publication is not intended as legal or tax advice. Financial Representatives do not render tax advice. Consult with a tax professional for tax advice that is specific to your situation.