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October Challenge – Are You Ready for Tax Season?

We are now officially in the last quarter of the year. It’s time to start thinking about year end and tax season…fun, right?

And it’s your last chance to make any changes to your with-holding or estimated tax payments for the year.

The challenge this month is to review your 2019 finances to date and see if you need to make any adjustments in preparation for 2020.

Personally, I have made more money than I anticipated so I know this will be an important step for me so I don’t get caught unaware when I file my taxes next year. While I don’t want to give the government a tax free loan, I also don’t want to owe a great deal come April…so this process is important for me.

I’m committed to making sure all my accounts are reconciled and pulling my profit loss statement to review and see if there is anywhere I need to make some adjustments. If I had products, I would be doing an inventory to prepare for sales and specials I might offer over the holidays.

Whether you are a business owner or a W2 employee, take some time this month to review where you are at and see if you need to make any changes. Also consider any giving you have planned for the end of the year or windfalls you anticipate…Bonuses! Oh, how I miss those days!

Do you have any specific tips for people as they look at the last quarter of the year and preparing to be in the best place for tax season?

Reference: https://simplyfinancialsplus.com/8-ways-to-prepare-for-year-end-financials/

Hope

Hope is a resourceful, solutions-driven online business manager with over two decades of experience helping clients streamline operations, manage projects, and grow their businesses through digital marketing and technology.

But life has a way of rewriting your plans.

A year ago, Hope made the decision to move in with her aging parents full time – a season she wouldn’t trade, even as it came with its own financial and emotional weight. Earlier this year, she lost her mother, and is now walking the tender, disorienting path of grief while learning what “forward” looks like from here.

Hope came to the Blogging Away Debt community in 2015 as a single mom raising five foster and adoptive children. She’s written through job changes, financial setbacks, and the bittersweet transition to an empty nest. Her kids are finding their footing in the world now – and so is she.

Rooted in faith and fueled by the same perseverance she’s brought to every hard season, Hope is ready to face her finances with fresh eyes and an honest pen. She believes that clarity, courage, and community can change the trajectory of anyone’s story including her own.

She lives in Austin, TX with her dad, loves adventures with her dog Addie, and is figuring out, one step at a time, what this next chapter is meant to be.

September’s Debt Reduction Update and Goals for October

by Elizabeth S.

Checking on the progress of my debt reduction and savings strategies today! Here are the raw numbers of my accounts, comparing when I first started blogging here and today:

Debt Reduction

Debt 07/14/2019

And Debt 09/30/2019

debt reduction

Debt reduction spreadsheet found at Vertex42

Savings Accounts:

Savings account: $2000

Increase of: $2000. I said I had $321 that week, but I spent the $321 in savings immediately. Since then, I’ve saved $2000 exactly and haven’t dipped in to the funds once.

Investment account: $379

Increase of: $379

I’ve put some side-hustle money in to an app called WealthSimple, which is a service targeted at making investment simple for millennials. I opened this account a few months ago with two $175 deposits and I’ve already made a little cash. I’m in an aggressive-growth portfolio, so my earnings actually dropped to $1 during some market volatility. Today, I’ve got $29 of profit in there. I’m using this account like an additional savings account and will be contributing around $200 a month to this.

Once I have more time, I’ll take more control over which investments I buy, as I actually quite enjoy the stock market. For today, I’m glad for the help WealthSimple offers. WealthSimple allows you to transfer money out relatively easily, so I like it for medium-term savings. These are funds I can transfer elsewhere in a year or two.

EDITING POST TO ADD: I use this as a savings account I can withdraw from pretty easily with next to no penalty. I am specifically saving this money in case I owe extra taxes next year.

Start investing better today! Click here to learn more.

Registered Retirement Savings Plan: $13 267.33

This is the Canadian equivalent of the 401K. My employer matches up to 3%, which isn’t much, but it’s free money so I make sure to take advantage of the full matching amount. I was going to contribute more to this fund, but the management fees are 1.94%. That’s a bit high, even for Canada where we pay a lot for financial products. I regularly see offers of 0.5% for management fees, and I’d like to open a new RRSP account once I have a few months of emergency savings saved up.

TOTAL SAVINGS:

$15 646.33

Net worth (based on total savings – total debt):

-$18 829.04

Takeaways

I’m going to give my efforts a B grade. Overall, my debt went down a bit. My savings went up significantly (considering I had none before), and I’m prioritizing saving over debt payment at the moment. If something happens and I lose my main income stream or need to move, I have almost nothing in the bank. That terrifies me.

I’m not thrilled that one of my credit card balances actually went up, but I’m going to make a payment of $100 to that today, and then continue to throw money at that as I can to bring it back down.

I think posting a monthly reconciliation of accounts is going to be imperative for my progress. As nervous as it makes me to review the health of my entire financial portfolio, it doesn’t make sense to hide from it.

Goals for October:

Track all transactions diligently
Post two spending diaries (chronicle all spending for a randomly chosen day, highlighting an average spending period)
Make a concrete plan for killing credit card debt, with or without line of credit approval

Keeping it simple because tracking all transactions is difficult enough for me!

Elizabeth S.

Elizabeth is a single woman in her early 30s, working as a manager at a software company and living in the most expensive city in Canada. She hopes to blog about her journey to eliminate debt and build savings for home ownership someday. Whenever she has taken two financial steps forward, she’s always taken a step back with a bad credit card purchase (we’re looking at you, unnecessary iPhone of May 2019). Elizabeth lives alone with her fur kids, a dog and cat, and when she’s not in front of the computer, she enjoys running, camping, reading, and baseball.