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December 1 2017

Three Ways to Maximize Your Last Paychecks of 2017

by Patrice Lee Onwuka

It’s December 1st and with just 24 days until Christmas, the holiday shopping season is in full swing. Gift giving is joyful, but can also be stressful from a financial standpoint.

Due to an improving economy and stronger consumer confidence, Americans are in the mood to spend this year. According to Gallup, Americans plan to spend $862 on Christmas gifts this year – up over $100 from last year.

With the final four (or two) paychecks of 2017, how can you make the most of your money?

We’ve got 3 few tips to maximize those paychecks:

  1. Plan your paychecks and prioritize your bills. Nothing steals holiday cheer like an overdue bill or missed mortgage/rent payment. It's best to pay your bigger (and most critical) expenses earlier in the month leaving smaller bills for later when you're doing Christmas shopping or in case an unexpected expense arises.
     
  2. Save and give. The goal is to maximize savings for the future and help your community while minimizing your taxable income. While tax reform may change what tax filing looks like next year, it's a good bet that the charitable deduction and retirement savings plans will remain intact.
    • Max out retirement investments accounts, take advantage of work-sponsored 401(k) or 403(b) plans (especially if your employer matches your contributions), health savings accounts, and 529 educational plans. (Read more)
       
    • Give to charity: cash, non-cash items, and stocks. Remember: for cash or non-cash donations over $250, you’ll need an acknowledgement letter/receipt from the charity for IRS reporting. How much of a difference can giving make to your tax bottom line? If you itemize, generally you can deduct up to about 50 percent of your adjusted gross income (AGI) for cash contributions, up to 30 percent of AGI for donations of appreciated property, and up to 20 percent of AGI for appreciated stocks given to private foundations.
       
  3. Shop smart. Start with your list of recipients and know what you want to give them. It’s easier to strategize when to purchase those items. Some items will get cheaper closer to Christmas while others are better purchased earlier in the month. And gifts don’t have to be bought from a traditional retailer to be a great gift.
    • Think: new to you. Websites like Poshmark, ThredUp and ebay offer resold or consigned clothes, shoes, accessories for every member of your family -- all sortable by color, size, brand, price, and condition. Many items are new with tags. It’s a great way to save tens and even hundreds of dollars over retail stores and websites.
       
    • Shop for what is actually cheaper now. The Black Friday and Cyber Monday deals are done, but that doesn’t mean discounts are over. For some items, the deals will be even bigger this month. Fortune gives us clues about when to purchase popular items:
      • Gift cards - in December
      • Laptops – Mid-December
      • Toys - two weeks before Christmas (quantities may be limited)
      • TVs - early December
      • Apparel – Late December but coats mid-December
      • Wedding dresses - December
         
    • Use websites that give you cashback or donate to your favorite charity as you shop. Make money while you spend money or give while you spend. Either way, it’s a win.
       

Hopefully these tips will help your make the most of your last paychecks. However, for many Americans shopping is out of reach because they don’t have enough income. Despite the recovery of our economy and low unemployment, wages have been stagnant.

Congress is working on a gift of its own to every American household that promises to grow our paychecks: tax reform. Tax cuts for individual workers will deliver more money in our paychecks, while corporate tax cuts and reforms will provide upward pressure on wages. As breadwinners for their families, women understand what an additional thousand dollars or more allows them to do for themselves and their families.

This holiday season, we can employ planning and smart strategies to make the most of our paychecks. Once tax reform is delivered, we look forward to earning more and keeping more of what we earn in the future.

 

Independent Women’s Forum’s mission is to improve the lives of Americans by increasing the number of women who value free markets and personal liberty. Sister organization of Independent Women’s Voice.
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