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If you have a child that's college-bound, then think about contributing money to a 529 college savings plan. If you're not familiar with this, it's a tax-advantaged savings account designed specifically to help you set aside funds for a college education. These plans are offered by each state and tend to vary from state to state. However, what they have in common is that there are two types – savings plans and pre-paid plans.
If you choose a savings plan, you'll be investing in mutual funds or index funds. A pre-paid plan is just that – a plan where you prepay all or a portion of an in-state public college education. In some cases, you may be allowed to convert your plan to pay for an education at an out-of-state college or private school.
If you're not familiar with a 529 college savings plan, the following video does a nice job of explaining the pros and cons of this plan.
Ask for your 529 reimbursements for this year
Yes, it's important to get reimbursed for any educational expenses you accrued during 2016. However, it's also important to understand that any qualified expenses you paid in a particular year must be reimbursed that same year. As an example of this, if you were to write a check for next spring's tuition in December you must then ask for reimbursement from your 529 savings plan before year’s end.
If you get an annual raise
If you're lucky enough to get a raise at year’s end, make sure that you commit to spending it for some financially good cause. For example, if you’re fortunate enough to get, say, a 4% raise you should increase the amount of money you're deferring into your 401(k) by at least 2%. Other good uses for this money would be to pay down debts like your student loans or mortgage, as a down payment on a house, to create an emergency fund or to just boost your savings.
Sell some investments at a loss
If you were able to sell some of your investments for a profit this year, think about selling some other investments where you've lost money to offset your gains. This simple strategy will cut your overall tax burden – and maybe substantially.
Establish goals for next year
Last, but certainly not least, don't get so tangled up in wrapping up loose ends from this year that you forget to establish goals for your finances and make plans for 2017. If you have a financial planner or advisor, now would be a good time to meet with her or him. And if you have a family make sure you include them in your financial plans for next year – and beyond.