Summer weddings, vacations, and outdoor barbecues are coming to an end, but these season activities may have put you in unexpected debt. Not to mention that the holiday season is approaching fast. Lend EDU conducted a poll showing that on average people spent over $1200 more than their expected summer and winter budgets. With that in mind, as fall approaches it’s the ideal time to give your finances a checkup and get prepared for the money you will spend during the holiday season.
PCS Debt Relief recommends taking these steps this fall to minimize debt potential for the year:
Consolidate Summer Debt
From the extra utility costs to the family vacations you took, summer may have cost more than expected. If you are having trouble paying off your credit card debt, refrain from using your card and try sticking to cash. This will help you easily track how much you are spending and how much you have left.
If you have a high debt balance on your high interest credit card, consider transferring the balance to a credit card that has a 0% interest rate for 15 months with a 3 percent balance transfer fee. Although you will pay a fee for transferring the balance, you can save a substantial sum in interest, depending on how much you owe. But make sure to pay off the balance before the 15-month period ends to avoid ending up in the same position as before.
Compare Service Providers
People tend to sign up with one service provider and stick with them indefinitely. Take a few moments to figure out if you could save some money by switching cable, insurance, and cell phone providers. Insurance rates are continuously changing, and it may be worth checking competitor rates this fall.
While you are at it, look at your credit card annual fees and the interest rate on your savings account. Make sure that you are not wasting money each month by not checking out other options.
Set a Holiday Budget
Are you ready for the Black Friday deals and holiday activities? The National Retail Federation says the average consumer spends $637.67 on gifts during holiday season. Black Friday can save you money on your gift shopping overall, although it will be a bigger sum spent on one day. If you set up a weekly automatic transfer of $20 from your checking to your savings account beginning in September, that will give you an additional $240 to spend on that day.
Besides gift funds, you will need to budget for any holiday travel expenses or seasonal activities, like ice skating. The easiest way to plan ahead is to create a list of all the events, dinners, and gift exchanges you will attend. From there, you can properly set a price limit for gifts that won’t stop you from partaking in seasonal activities and travel.
Prepare For Open Enrollment
Open enrollment for health care occurs every year in the fall for Medicare and employer-sponsored plans. Make sure to give yourself plenty of time to gather all the information you need. Open enrollment for 2020 opens November 1, 2019 and closes on December 15, 2019.
If you do miss the deadline, you must have had a qualifying life event in order to qualify for a special enrollment period. A qualifying life event includes getting married, losing coverage, or having a baby.
By applying for healthcare through the marketplace you may find you qualify for discounts on healthcare plans. If you choose not to pay for health insurance, you will pay a penalty while filing your taxes. Med Mutual says if you could afford health insurance but did not purchase coverage, you will have to pay a penalty amounting to either 2.5 percent of your yearly household income or $695 per person ($347.50 per child under 18), whichever is greater. Be prepared to set up your healthcare on time this fall to save yourself from potential penalty taxes.
Boost Your Retirement Savings
Are you paying into a 401k? If so, now is a great time to max out your contributions for the rest of the year. The IRS allows you to contribute up to $18,000 a year, and the amount is deducted from your taxable income. Those older than 50 years old can even contribute an extra $6,000 a year. While you may be focused on the now, It is equally important to prepare yourself for a debt free future.
If you find that you have strayed from your budget, PCS Debt Relief can help you get back on track. We are here to listen to your unique situation and are ready to help you achieve financial freedom. Call us today at (636) 209-4481 for a free consultation.