Now that the holidays are well behind us, February is an ideal time to start making the most of your finances and planning for the year to come.
Make more progress on taxes
For January’s best money moves, we suggested you start preparing for tax season. Keep the momentum going in February as you continue to gather incoming 1099s, W-2s and other documents, check them for errors and start thinking about how you want to prepare your taxes this year. Some items to consider: Do you want to do your taxes yourself or use a professional? If married, do you want to file jointly or separately? Sorting these matters out now can make tax time in April a breeze.
Start saving for vacation
Planning a spring break or a summer getaway? Don’t wait until the last minute and put everything on a credit card — start preparing for your vacation now. Begin by taking a look at your budget and determining how much you can sock away each month from now until your trip. You may even want to set up automatic transfers from your checking account to a savings account so you can’t forget to set aside money. By the time you need to book your hotel or flights, you can pay outright rather than putting them on plastic and paying interest for that luxury.
Have a frugal Valentine’s Day
Conventional wisdom says you must shower your beloved with jewels, roses and other costly gifts. But you don’t have to go broke in the name of Cupid. Why not opt for sweet savings by eating a homemade meal by candlelight, followed by exchanging DIY gifts and watching a rom-com from Redbox? If you insist on spending, call on smart shopping techniques such as comparing prices across retailers and seeking out promo codes. Sign up for email newsletters from online retailers, which not only alert you to sales, but also frequently offer a percentage off as a perk for new subscribers. You can also try price matching for retailers that allow it (check policies for each store). This technique allows you to score the same deal offered by a competitor. If you’re buying jewelry for Valentine’s Day, be aware that many jewelers offer limited-edition sales, so plan ahead and don’t pay full price. Additionally, if you need to buy gifts for multiple people, try to use the same website so you’re likely to hit the free shipping threshold. If consumerism isn’t your thing, you could always donate to a reputable charitable organization in honor of your loved one instead.
Use up your flexible spending account money
If you have a flexible spending account through your employer, which allows you to set aside pre-tax dollars for eligible medical expenses, you technically have to use up your funds by the end of the calendar year. Some plans, however, give you until mid-March of the following year to use up your money, but after that, you lose what you don’t use. If you do have such a grace period and you still have money left in your account from the previous year, February is the time to focus on using it up. You could schedule a vision exam and buy new glasses, get a flu shot or have a dental cleaning. Some plans even cover chiropractic and acupuncture treatments. If in doubt about what’s allowed, check with your FSA provider.
From getting ahead on taxes and vacation savings to making the most of your leftover FSA money, February is the perfect time to move on from the holidays and set yourself up for a successful 2015.
Illustration by Dora Pintek