Many Americans are eager to welcome the New Year and get a fresh financial start. While setting goals for the new year is admirable, there’s really no reason to wait to start improving your financial health — tackling several money moves before the end of the year will build momentum toward even greater financial success once 2021 rolls around.
You don’t have to accomplish major milestones, either. A few small steps are enough to improve your fiscal health well before the ball drops on New Year’s Eve.
Here are five money moves you can easily make before year-end to give your finances a boost.
1. Set a Holiday Spending Budget
More Americans than ever are struggling to make ends meet, but they won’t let that stop them from making the most of the holidays. In fact, a recent survey from Credit Karma found that 30% of consumers are planning to take on debt to afford children’s gifts and other seasonal purchases.
However, racking up balances on your credit card is only going to set you back further as it relates to your financial health.
Taking the time to set a budget and discuss gift expectations with loved ones ahead of the holidays can help you avoid taking on debt. Use the Santa’s Bag app to create a gift shopping list and assign a budget per person.
This tool will help you track purchases and monitor spending so you don’t go overboard. Just make sure to factor in hidden holiday costs — including postage for greeting cards, gift wrap, and groceries for holiday meals — into your overall holiday spending plan.
You can also upload pictures of all your shopping receipts to a free cash back app like Fetch Rewards to earn free gift cards to stores like Walmart, Amazon, and Target to offset other holiday expenses.
2. Review Your FSA and HSA Balances
If you’re enrolled in an employer-sponsored health plan and contributing to a Flexible Spending Account (FSA) or Health Savings Account (HSA), review your balances and figure out if you need to use them before the year is up.
The pre-tax dollars you put into these accounts are only eligible for qualified health care and medical expenses, so consider scheduling any outstanding appointments, such as dental or vision exams or a non-emergency procedure you’ve been putting off. Though your HSA balance is carried over to the following year, your FSA funds could be lost after December 31.
Check with your benefits department to find out if your employer is offering to extend the use of your current balance through March 15, 2021. Otherwise, request to roll over a percentage, but keep in mind that it’s up to their discretion whether they allow this.
If you have met your health care deductible, taking advantage of preventative health care appointments and medical procedures now before year-end could save you a lot of money when your new plan kicks in on January 1.
3. Negotiate Rates with Bill Providers
When was the last time you shopped around for homeowners or auto insurance? Or the last time you called your cable company to apply for a new promotion?
Take time now to review your current bills to see which have slowly increased over the past year. Running a quick online search will help you pinpoint competitive rates to leverage in your negotiation with current providers, as many companies will be offering year-end savings to secure new customers.
If your current providers aren’t willing to budge in price, there’s no harm in switching to a new company if it results in savings.
When it comes to insurance plans, you can gather quotes quickly through sites such as Insurance.com and TheZebra. Even raising your deductible is another way to reduce your annual premium and lower your monthly payments. Just make sure you have the money stashed in a separate emergency fund to cover the deductible so you aren’t scrambling if something happens.
For help scoring better rates on other household bills, use tools like TrueBill and BillCutterz which do all the negotiating for you. They keep a percentage of the savings they secure, but it’s a small price to pay for the convenience.
4. Rebuild Your Credit Score
Taking advantage of financial aid during the pandemic, such as working with your lender to postpone mortgage payments, wasn’t supposed to hurt your credit score, according to the Coronavirus Aid, Relief, and Economic Security Act passed last March. Unfortunately, some consumers are seeing dings regardless.
Your credit score may be suffering whether that missed payment was a mistake or you just failed to obtain advanced approval from the lender. Taking steps to rebuild your score is crucial to set yourself up for financial success in the new year.
A higher credit score will result in better interest rates when applying for loans, which can mean lower payments and bigger savings overall.
One simple way to improve your credit score is to pay down your card balances. A recent report from LendingTree found that paying off $500 in credit card debt can increase your credit score by seven points in just one month.
Another option is to consider a credit builder loan through apps like Self or your local credit union. Instead of getting the money upfront as you would with a traditional loan, you make small monthly payments to your account over the course of one to two years.
Your lender then reports these payments to all three credit bureaus to help you build a positive payment history. At the end of the term, the payments you made over that period are returned to you, sometimes with added interest, netting you a nice amount of savings.
5. Boost Your Cash Flow
Although cutting back on certain purchases is key to saving money, sometimes it’s not enough to really make a dent in your financial goals. You can fast track your savings or debt payoff efforts by finding easy ways to make money from home and boosting your cash flow.
For instance, this is a great time to cash in on clutter. Look around your home for items you no longer need or use and sell them online.
You can sell women’s clothing on sites such as Poshmark or Tradesy, move furniture and home goods through local marketplaces like OfferUp, turn gently-used wedding dresses into cash via StillWhite.com, and get paid instantly for an old smartphone through Decluttr.
Selling unwanted goods isn’t the only way to make extra cash. You can do plenty of flexible side hustles from home that won’t interfere with holiday celebrations.
For instance, you can make up to $1,000 a month by pet sitting through sites like Rover.com, where you can set a schedule that works for you. If you’re working from home anyway, this side hustle is an easy way to earn extra income while enjoying some canine companionship.
Other ideas include online tutoring through Varsity Tutors, freelancing your professional skills through UpWork or FlexJobs, selling handmade goods via an Etsy shop, or running deliveries through Postmates, Shipt, or DoorDash, among others.
You can even get paid for sharing your opinions. Sites like 2020 Panel host virtual focus groups that pay participants anywhere from $50 to $200, on average, to share their thoughts on various topics, such as personal care, grocery shopping, and travel.
You can also make a little extra money taking online surveys through sites like SurveyJunkie.com or Inbox Dollars. The surveys are rather mindless, so you can complete several while binge-watching a new Netflix series.