Financial vital signs to watch for right now

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A semi-annual financial review is often a good idea. This year, it’s almost essential.

As people return to the office, travel resumes, and Congress makes significant changes to various laws affecting your finances, consider taking the time to check your money. You may be able to take smart steps to reflect the new realities.

Budgeting

See where your money is going now. Using a budgeting app or taking a close look at recent bank and credit card statements can help. Then think about the expenses you might face in the near future.

If you use your car more, for example, you may already be paying more for gas and insurance, but you could also face higher costs for maintenance or repairs. If you have children, you can plan for back-to-school fees, sports equipment and activity fees. Holidays, travel, weddings, and other celebrations should also be budgeted for.

It may be a good idea to cut some costs down so that you can afford those resurgent expenses. One possibility: run your streaming services and other subscriptions. These might have supported you during the lockups, but you can pause some now to save money while still enjoying the others.

Perhaps you have more income: you return to work after being unemployed, or you are a parent about to get the first of six monthly IRS Child Tax Credit checks. (These payments will be up to $ 300 per eligible child as of July 15). Making a plan for that income can ensure it goes where you want it to go, rather than pouring into unforeseen purchases.

Debt abstention

Federal student loan forbearance is expected to end this fall, with monthly payments resuming in October. If those payments were a challenge, contact your lenders to see if income-driven repayment plans or other measures might help.

If you have requested forbearance from your mortgage payment or other debt, that also has an expiration date. Overdue debts aren’t forgiven, so you’ll usually need to plan to make up for missed payments. Check with your lender what your options are.

Flexible savings accounts

Congress more than doubled the amount employees can contribute to flexible child care expense accounts in 2021. Workers can contribute a maximum of $ 10,500, up from $ 5,000 in 2020. The limit for ASPs health care costs remain at $ 2,750.

This year, you are also allowed to make mid-year changes to your contributions to either account, which normally requires a change in life circumstances, such as marriage or birth. ‘a child.

Your employer must agree to these changes, but if they have done so and you can increase your contributions, you could save a lot in taxes.

Frequent flyer programs

Last year, airlines, hotels and car rental companies relaxed the rules on their loyalty programs to reflect travel restrictions in the event of a pandemic. Many have extended the expiration times for points, miles, and free hotel night certificates. But the pause on exhales won’t last forever. Check your rewards programs and plan to use your rewards before they disappear.

Likewise, you may have canceled travel credits which will also expire if you don’t use them. If you can’t use them in time, ask for an extension.

Health insurance

If you buy your own insurance, you might get a better deal on Affordable Care Act trade-ins now that Congress has extended the subsidies, lowering costs for most people. If you don’t have ACA coverage yet, there is currently a special enrollment period that ends August 15th. If you receive unemployment benefits at some point in 2021, you can benefit from a comprehensive policy without a premium. COBRA coverage to extend an employer health insurance plan is also free from April to September.

Retirement planning

Companies with 401 (k) are now required to let part-time workers contribute if they have worked more than 1,000 hours in one year or 500 hours in three consecutive years. Contact your employer for more details.

Congress has removed the age limit for contributing to IRAs, so you can contribute beyond 70 and a half as long as you have earned income such as wages, salaries, commissions, or income from a job. independent. In addition, the age that typically triggers the minimum required distributions from retirement accounts has been moved from 70 and a half to 72 for those born after June 30, 1949.

If you are feeling generous, the age at which you can start making qualified charitable distributions from an IRA is still 70 and a half. These withdrawals will not be added to your income if the distribution is made directly to a qualifying charity.

Liz Weston is a columnist at NerdWallet, a certified financial planner and author of “Your Credit Score”. Email: [email protected] Twitter: @lizweston.

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