3 things to discuss this time of year …about money

Though my days are fairly full right now with cookie baking and holiday movie watching, there’s something else on my mind this time of year: end of the year planning. Can you believe there’s only 14 days left of 2013?

It might feel like a party crash right now, talking about grownup stuff like money, but it’s honestly the best time to think over your plan. If you keep things simple, and if you get help where you need it, it honestly doesn’t need to be a massive headache—you can do smart stuff with your funds, and get back to your merry-making.

Here are the three main things we discuss about our money this time of year.

1. Where do we want to give?

Non-profits need your support more at the end of the year than any other time, and it’s a great time for you to give—tax write-offs to finish the year, and a natural time to embrace giving as a family.

The second half of December, Kyle and I chat about what charities have approached us for an end-of-the-year gift, and we decide where to channel our funds. We usually spread out our giving with smaller gifts for multiple non-profits, though there have been years when we’ve given all our funds to one cause.

We’re not talking tons of cash, of course—we simply have a sinking fund called “giving,” and whatever’s left in there after our automatic monthly giving is emptied for these end of the year gifts. No reason to keep it there, only to be considered taxable income, when we plan on giving it regardless.

2. How do we want to invest?

A little over a year ago, we did a very grownup thing—we met with an investment specialist. We used Dave Ramsey’s ELP program, and I was so glad we did, because we found a great guy who used normal-speak to explain otherwise ridiculously confusing things.

Okay, let’s be honest—a lot of it is still confusing to me, and just about every time Kyle and I sit down to look over our stuff, he has to re-explain what I’m looking at. It pretty much looks like, “Beep boop beep, blah-dee blah blah bloop” to this words-over-numbers girl.

Photo source

But here’s the thing I love about our investment guy—he doesn’t mind that he has to re-explain things to me whenever we meet. He knows what I do for a living, and he also really gets what it’s like to work for yourself. When we first sat down with him, he looked over all our previous investments—which were all over the place, from previous employment—and he suggested how to move things around where they need to be (along with advising us on where some things should stay).

We had to move our IRAs, so he helped us do that, and he set me up with a new tax-deferred 401K, which was just what I needed as a self-employed writer. He helped us create a nice mix of taxable and tax-deferred investment options.

If you’re like me, you might be thinking an investment guy is expensive, for people with bags of money to invest (emblazoned with the dollar sign on the front a la Scrooge McDuck). Well, I can tell you he has been worth EVERY penny we give him. Because knowing I have someone on my team, to answer my dumb questions and to give sound advice based on knowing who we are, where we live, and how we work? Priceless. With some of our investments, he gets a percentage; with others, he gets a flat fee. It’s totally reasonable.

So at the end of the year, Kyle and I look over our investments (about four times a year our guy sends us an easy-to-read, streamlined update on how everything’s going), and we decide if we want to channel more funds into one of our tax-deferred investments before the end of the year. If we have any questions, our investment guy is only a phone call or email away.

If you want someone like this in your life, might I suggest looking via the ELP system? It hasn’t steered us wrong yet. (We’ve also used this database for finding our realtor and our insurance guy.)

3. Where do we want to financially be this time next year?

Lastly, Kyle and I talk about where we’d like to be this time next year. I’ve found that vocalizing our financial goals, as far-off and ridiculous as they seem, somehow seems to help us actually reach them.

There’s nothing magical about this discussion, of course, but perhaps it’s the act of communicating that kicks us in gear towards making those dreams more realistic, to brainstorm what it would look actually like on a monthly basis to make them happen.

Some years, those goals have happened in half the time we anticipated. Some years, those goals never happen at all. It’s okay, though. It’s still good to dream and plan.

Now, don’t picture all this financial talk happening over a big white board and yellow legal pads, talking long into the night while our kids sleep. For us, during this hectic time of year, it works best for us to chat while we chop the vegetables, as we drive across town, or perhaps for a few minutes over a beer during date night.

We don’t make a huge deal out of it, in other words. But we’ve learned that for us, it’s irresponsible to just shove money-talk under the rug and hope the need miraculously goes away—we just spent a more-than-usual amount on gifts; the least we could do is talk about how we’re channeling that money towards others and to our future selves.

3 things to discuss at the end of the year about money.

So yeah—I encourage you to talk about giving, investing, and financial goals sometime in the next two weeks. Your future selves will thank you.

Do you have any end-of-the-year financial plans? What’s the hardest part about investing? The easiest?

This post is sponsored by Dave Ramsey’s Endorsed Local Providers.

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  1. Allie

    Hi Tch,

    Thanks for the GREAT post. This time of year, we are reminded how important our families are, and want to protect them by saving for their futures.

    As someone who works in the nonprofit sector, I encourage everyone to donate! Just a small plug – take some time to research your causes. Many nonprofits do amazing work, but of course there are some scams! Spend some time doing research (I use GuideStar.org, but I’ve heard CharityNavigator is great too!) so your money is used for the best causes!

    Thanks, Tch!


    • Allie

      And I keep spelling your name wrong. So sorry, Tsh!

    • Tsh

      Yep yep! Always learn where your money goes.

  2. Susannah

    Ooh, a post about giving and investing… which is fab, but I’d love one on what to do when there’s no pennies left for either! Perhaps it’s just me, but as a one-income family at this time of the year, we’re always really short, however simple we try to keep Christmas.

    • Tsh

      Understood! Kara’s posts lately have been really great in this department, but we’ll continue to write more in 2014.

  3. Faigie

    What is a major problem is when one of us would love to budget and plan and the other spuse is totally clueless and not that interested 🙂

    • Rachel

      Don’t give up, Faigie! It was a year and a half of me trying out different budgeting techniques – all on my own – before my husband got on board. I didn’t think I would ever see the day but he saw how much it meant to me, how much work I was putting in, and he eventually came around. Now he loves it and we have been tracking all of our spending and using a budget for over two years. Good luck!

  4. Rachel

    Great list! We are still discussing where our giving will go this year. The tax year here ends in March so we aren’t under the gun.
    The other financial piece we work on at this time of year is reviewing our spending and tweaking our budget accordingly. We try to forecast any big expenses for the year that might come up, review our emergency fund and change or remove some of our spending categories as needed. I am actually looking forward to this chat and so is my husband. This from the couple that was in some pretty big debt just a few years ago!

    • Tsh

      Good ideas!

  5. Kelly

    I love thinking about money planning and investing because it means we’re spending our money on things we care about and not wasting it on stuff we don’t. I recently started using YNAB–You Need a Budget–which is an AMAZING software/app that has changed our lives. I’m not sure how to express how great it is, without sounding like a commercial or sounding like I have some stake in the company (I don’t). But, they have a free 34-day trial and by halfway through I was hooked. Try it out. http://www.youneedabudget.com/

    • lehal

      We’re a YNAB family too. Started more than 3 years ago now when we bounced checks not because we didn’t have the money but because we weren’t organized with it. Using the software and really planning through our budget while also tweaking as we go has given us so much more confidence. And we are much better at talking to one another about it. They will probably have a new-years promotion of some sort, and it is absolutely worth looking into.

    • Kari

      YNAB has been amazing for us too! The philosophy finally clicked with my husband, so he’s much more engaged in our finances now. It has been a great tool for simplifying and de-stressing our financial life. I’m not affiliated in any way, but I’d encourage just about anyone to do the free trial!

  6. Marion

    Very timely! We were planning on sitting down tonight to talk end of year budget, giving and what we want to save for in 2014. Glad I was not the only one that thought retirement and investing was a grown up thing 🙂 We love our ELP too 🙂

  7. Prerna

    Oh.. totally how things are at our home.. Mayank and I discuss where we want to be financially either while driving around or over our evening tea, and yes, each time we review our investments, it sounds pretty much the way it does to you:) But in all seriousness, we’re very focused on living debt-free and growing our corpus while giving as well, SO loved this post!

  8. Maggie

    Love these posts about financial planning, the mechanics of how our households run is endlessly fascinating to me. I always wonder… How do they do it? How do other families decide where and how to place resources? I’m so glad you share this stuff!

  9. Northwest traveler

    We did this last year for the first time and it paid off — we’d decided to try and end the year with a budget surplus for the first time ever so that we could pay for a vacation, and we did! Having a specific goal in mind made it so much easier to trim spending day to day. My biggest savings area – eating out at lunch.

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