The leaves may be changing colors, but you probably prefer that your wallet still have a lot of green.
Here are some money moves you can make this month to help keep your finances on track.
Open a holiday savings account
The busy shopping season is coming soon, but there’s still time to set cash aside so you won’t be tempted to go into debt over the holidays. Consider starting a savings account at a bank that lets you automatically contribute toward specific goals, including holiday spending.
Capital One 360 gives you the ability to save money in several subaccounts for special purposes. And many financial institutions, including Ally Bank and Navy Federal Credit Union, let you open multiple savings accounts for different seasonal goals.
With any of these savings accounts, you can generally set up automatic transfers at regular intervals, such as paydays. This could help you build up a cash cushion without much effort.
Think about cutting investment losses
Every September, John Fowler, a financial planner in Dallas, Texas, takes a look at his investments and makes decisions about the ones that are losing money. “I ask myself, ‘If I could buy the stock now, knowing the price, would I still buy it?’” he says. If the answer is “no,” he knows it may be time to sell the security.
If you sell an investment at a loss, it might offset gains elsewhere. That could help lower your overall tax bill, a process known as tax loss harvesting.
September can be a good month to consider your choices. “It’s after the earnings season [when companies report their financial performance] but before the holidays, so there’s usually a lull where you can take some time and review your investments,” Fowler says.
But you’ll want to be aware of any special tax rules before selling. For example, the IRS has a “wash sale” rule that puts restrictions on deducting some losses from stocks or securities you sell if you acquired similar stocks within 30 days of the sale, says Andy Tilp of Trillium Valley Financial Planning in Sherwood, Oregon. So it’s always a good idea to talk with a tax professional before making any big moves, he says.
Write down long-term goals
September often seems like the start of a new year, as people return to work or go back to school after summer vacation. With the change in schedule, it can be a good time to think about new life goals, Tilp says.
He suggests thinking about how you’d like to see yourself in a few years. For example, do you want to start a family soon? Or buy a home? If so, now could be the time to start putting money away in a certificate of deposit (CD) or savings account.
“Take some time and talk with your spouse or partner about your long-term plans. You aren’t likely to achieve your dreams and goals by just hoping. It takes some planning and saving to get there,” he says.
Invest in your career. Companies tend to reward lifelong learners, so sharpening your skills can increase your value in the workplace. Consider taking a course or online class on a subject that’s important in your industry. The knowledge could help you advance at work and earn more money in the future.
Take some time to review your resume and identify gaps in your experience that you could address. And even if you’re already happily employed, consider asking your boss about opportunities for additional training in an area that could benefit both you and your employer.
The bottom line
September is a good month to plan for the future. By reviewing past investments, writing down your goals and taking steps to boost your career, you can position yourself to be financially comfortable in the short and long term.
Image via iStock.