Avoid a 'fiscal cliff' in your life

  • Published
  • By Lt. Col. Christopher Abate
  • 60th Air Mobility Wing comptroller commander
TRAVIS AIR FORCE BASE, Calif. --  The arrival of the new year affords each of us an opportunity to reflect on past decisions and adjust for the future.

This is especially true for financial matters as pay adjustments may be applicable and a new tax year begins. So while Congressional leaders deliberate more permanent solutions to the national fiscal cliff, now is the time to revisit your personal expense, saving, and tax situations so you don't head for a cliff of your own.

Whether you own a home or rent, you likely have expenses that could be evaluated to ensure you're getting the best value for your money. If you're a homeowner, then perhaps refinancing may be an option to explore.

If you have numerous loans and credit card bills, then debt consolidation may be an avenue to financial improvement. Interest rates and associated fees will be key factors in determining if these debt-reduction choices are right for you. Not everyone is mired in debt, but almost all of us have recurring monthly bills that eat away at our income.

When was the last time you shopped around to ensure your cell phone, internet, cable TV and insurance plans were still good values? There's no time like the present to ensure you're getting your money's worth for the services you use each day.

While it's a time-honored tradition to start the new year with resolutions about diet, exercise and kicking cigarettes it's also the perfect time to start a savings program for your future. When it comes to savings, establishing a six-month emergency fund needs to be high on your to-do list so you can overcome any unforeseen challenges. From there, simply getting accustomed to saving a little money each month is a crucial foundation for your financial success.

Another easy option to boost savings is diverting future pay raises right into your bank account. It's often easy to find new ways to spend money we don't even have yet, but curbing the desire to spend more now will pay long term dividends. If you're just getting started with a savings program, then February's Military Saves campaign is a great opportunity to get you on the right track to financial independence.

While expense assessments and savings programs are certainly keys to financial success, don't forget tax considerations. If you typically receive a large tax return, then you might consider increasing your withholding status to put more money in your paycheck instead of that annual lump sum. Buying a house? Getting married? Having a child? Looking for investments? Going to school? All of these life events bring about tax benefits that can further enhance your financial plan.

The new year has arrived and now is the time to evaluate your financial situation. With any luck, proper planning and good financial habits will lead you to success and help you avoid your own fiscal cliff.