I made you a December to-do list (you're welcome)

Money
Dollar Scholar
Hi y’all —

Can you believe it’s already December?

This is usually my favorite time of year to be in New York City. I drink steaming mugs of spiked hot cider in cozy bars, marvel at the elaborate decorations on Fifth Avenue, buy trinkets at crowded holiday markets, meet up with old friends in town for company parties, and eat an obscene amount of baked goods. Think
Dash & Lily, but real life.

Thanks to the pandemic, things are different this December. But I’m busy in other ways. I’m attempting to get my Christmas shopping done online, juggling a half-dozen work deadlines, planning socially distant gift exchanges, and — yes — still eating an obscene amount of baked goods. (
Peanut butter blossoms, anyone?)

As the year winds down, I’m also trying to
get my finances in order so I’m in the best possible position heading into 2021. I asked the experts: What should I put on my end-of-year money to-do list?

Here are their suggestions.

1. Review my budget.

Jason Katz, CFP and principal at
Bartlett Wealth Management, acknowledged that thinking ahead is a tall task right now. “[With] the craziness that’s happened in 2020, trying to prepare for 2021 sounds like it’s very, very difficult to do, because we don’t know what 2021 looks like,” Katz says.

Even so, it’s a good opportunity to scrutinize my
budget. Because everything changed in March, though, I shouldn’t use recent numbers to set guidelines for 2021. Katz encouraged me to look back at my goals and spending from early 2020.

“What you did in January and February — what did that look like?” he says. “Look at 2021 and possibly build some of those things back into the budget as we all hope to return to some sort of normalcy.”
ds71 tweet
2. Create a safety net.

I know I talk about this constantly, but it really is true: Having an
emergency fund is crucial. Charity Falls, senior wealth strategist at the Private Bank at Union Bank, says there’s no time like the present to start building one. (See Issue #41 for more on how, exactly, to do that.)

3. Give to charity.

When the Tax Cuts and Jobs Act increased the standard deduction, millions of people
stopped itemizing their taxes — and therefore stopped taking deductions for charitable contributions. But there’s a provision in the CARES Act that allows taxpayers to take a charitable deduction of up to $300 without itemizing. It’s good for the community and for my tax burden.

“It’s a 2020-only opportunity,” Katz says. “Make those cash contributions up to $300 before the end of the year, and you’ll get that deduction.”

I should look for a tax-exempt organization I believe in, and donate using check, credit or debit. I’ll want to keep my receipts just in case, and I’ll want to move fast: The deadline is Dec. 31.

4. Spend remaining FSA money.

New Year’s Eve is also the deadline for some employees to use or lose their Flexible Spending Account dollars.

The IRS did change a handful of FSA policies earlier this year, and grace periods do exist, so I should check the rules for my individual plan before making any big moves. But generally, I want to spend my FSA funds by Dec. 31. Eligible expenses include at-home COVID-19 tests, thermometers, glasses, tampons, allergy meds, bandages and more. Get in, loser, we’re going shopping.

5. Contribute to my retirement account(s).

Katz told me that if I can max out my 401(k) contribution before the end of the year, “that’s an awesome goal.” (For most people, the
limit is $19,500.) I may want to talk with my company’s payroll department to see if I can have more taken out of my next few paychecks.

Falls, meanwhile, said to consider contributing to an
Individual Retirement Account “if you have some extra cash going into year-end.” The deadline isn’t technically until April 15, 2021, but it might be simpler to do it now for record-keeping. The general limit on IRA contributions is $6,000.

6. Ask for help.

According to Falls, a financial advisor (slash fiduciary) can “help you look holistically at your financial picture, including understanding your income and your savings and helping you determine what your cash flow needs are.” Given the volatility of 2020, it’s not a bad idea to
check with an expert to make sure I’m on track going into 2021.
THE BOTTOM LINE
(but please don't tell me you scrolled past all of my hard work)
I’ve got my work cut out for me.
Rihanna
via GIPHY
RECEIPT OF THE WEEK
check out this crazy celebrity purchase
Dolly Parton
via Instagram
If and when we get a coronavirus vaccine, we may have Dolly Parton to thank. The country singer/philanthropist made headlines last month when it came out that a $1 million donation she made to Vanderbilt in April was crucial in development of Moderna’s COVID-19 research. Similarly inspiring: All the people singing “Vaccine” to the tune of “Jolene.”
INTERNET GOLD
five things I'm loving online right now
1 I have so many questions about this “ancient squid-like animal with a shell that looked like a 1.5-metre-long paperclip” from 68 million years ago. How did they live so long? Did it get annoying to have such a long tail? Were they pals with Clippy? More research needed.
2 Want to watch Jason Derulo discover a beehive at his house, eat fresh honeycomb through a beekeeping suit and fail to conceal his mild terror? Of course you do.
3 Actor Dev Patel’s love of vintage Big Time Rush shirts is so pure (and so mystifying).
4 My colleague Mallika recently published a wholesome story about teenagers who are already saving for retirement. When I was 15, I spent my time largely fiddling with the lyrics in my AIM profile, but these kids are on another level — they’re investing in Disney, adding money to Roth IRAs and attempting to become millionaires by 33. I love their motivation, and I love this quote in particular: “For a teenager, retirement might seem a world away when we’re just trying to study for our next biology test.”
5 Gingerbread houses are out. Charcuterie chalets are in.
401(K)9 CONTRIBUTION
send me cute pictures of your pets, please
Ace
via Kylie McCracken
Meet Ace, seen here enjoying the Pittsburgh skyline. Ace loves adventures and making chewitable contributions before EOY.
The finish line of 2020 is near, folks. We can do it!

See you next week.

Julia

P.S. Last issue about determining how much of each paycheck to save inspired some great replies! Scholar Shannon told me she contributes 15% to her employer's 401(k) and maxes out her Roth IRA. Scholar Donna said she lives on 80%, saves 10% and gives away 10% before paying anything else. Finally, Scholar Smith wrote in to remind me to increase my 401(k) contributions each year.

P.P.S. What are you hoping to accomplish before New Year’s Eve? What’s your favorite charcuterie board cheese? How would you react if you found a ton of bees in your house? Send fanmail to
julia.glum@money.com or @SuperJulia on Twitter.
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