Frugal Family: Money-Saving Strategies to Implement Now

It’s the middle of December. Most of us are caught up in holiday preparations. We’re spending more than we have in any other month this year. We're purchasing decorations, gifts, food and wine.

While comparison shopping and frugal buying are always noble pursuits, end-of-year financial moves that save tax money and preserve savings are even more beneficial.

Do you itemize on your federal tax return?  If so, consider these recommendations:

Make an extra mortgage payment. Those of us who incur interest on our home loans can deduct thirteen months’ worth of interest instead of twelve by making January’s payment in December.

Sell an investment at a loss to offset gains. Anyone who sold a stock or mutual fund and realized a profit should consider liquidating an underperforming holding to offset the capital gains in order to reduce the tax liability.

Give to charity. Writing a check to a non-profit organization will not save money, but many of us choose to support charities whose work we value. Donating in-kind items that can be used by these groups, however, is beneficial from a tax perspective.

Fund retirement plans. If at all possible, contribute the maximum allowable amount to an employer’s 401(k) plan before the end of the year.

If it’s feasible, put money in an IRA as well. The amount won’t likely be deductible, but it will grow tax-free until retirement. This option is available through April 15 for the preceding year.

Make energy-saving improvements to you home. It may be too late to get new windows installed, but perhaps new insulation is possible. Total tax credits for eligible expenses cannot exceed $500, but for homeowners who are already planning these improvements, it’s worth looking into.

Do you have a Flexible Spending Account?

These plans are great because they save participants money by exempting their contributions from federal taxes. The accrued funds, however, must be spent on eligible medical expenses by the end of the year; otherwise, the money is forfeited. Those who find themselves with a balance should get a new pair of glasses or pay ahead on the kids’ braces.

Can you take advantage of retail or entertainment deals that expire on Dec. 31?

Many restaurants and retail establishments are offering incentives to buy gift certificates before the end of the year. If you know you are going to patronize a merchant that has a promotion going on, and you have the cash available, pre-pay and save.

Not Your Average Joe’s is handing out $10 gift cards for every $50 worth of cards purchased.

Nashoba Valley Ski Area is adding $10 to every $60 card bought online.

1 on 1 Self Indulgence Spa is awarding $20 gift certificates to those who buy $100 gift cards.

Seafood lovers will receive a free lobster dinner with a $200 gift card purchase made in person at Legal Sea Foods.

Do you know of something you can buy now so you save later?

US Postal Service Prices are going up in mid-January. Save on postage by picking up some Forever Stamps, which are immune to price increases.