Snow, Snow, More Snow And Your Money

SNOW! I got to thinking today as my kids got all giddy with excitement about the news of Snow that’s only because they’re thinking yay snow day.

We do get snow, but snow days are a huge bonus and cause for excitement especially for kids not so much for us adults if we have to drive in it to get to work a far cry from snow angels and a family favorite Tobogganing.

However, if you’re one of the few who really have to take a snow day, keep reading but don’t forget to get outside for some fresh air. This winter has truly been an odd one and a scary prospect that global warming is real.

A snowy day is an ideal day to review your financial health. Do I hear you say boring! True this sounds boring especially when you could be catching up on much needed sleep; house chores; winter sport etc.,

But, I promise you this is the perfect day to deal with your…drum rrrrrroll:

Income Tax

Yikes! Yes, you’re reading that right. Because of the time of the year where we have winter in North America, a snow day is perfect to organize your tax documents.  In the U.S. the tax deadline is April 15^th and in Canada April 30^th.

A snow day is the perfect day and time to:

• Organize tax receipts (W2; T4; Retirement and investment receipts);
• Book an appointment with your accountant and/or
• Book an appointment with your bookkeeper

These are important first steps and more importantly if you run your side/home business.  It never ceases to amaze me how long the lines get at the post office on tax deadline day with people scrambling to get the date stamp before midnight. This is unneeded stress that could be better managed or avoided altogether. Besides if filed in a timely manner, you can save yourself a trip and file online.

It’s always a good idea to plan to file prior to the deadline and more importantly if you know you’re going to owe. In our parts of the world the tax man isn’t that forgiving when it comes to tacking on interest for each day you’re late especially if owing.

Here’s the bonus, if you’re one of the few who will be getting a refund then that boring task is no longer gloomy.  You can even dare to daydream of yourself lying on a beach or splurging just a little on yourself.

Dreaming of a summer beach vacation? Not so fast. Before you do, ensure you plan for how you would handle this refund if not you may fall prey to what happens to most of us a principle also known as Parkinson’s law (the more money you make or have, the more your expenses /spending increase) suddenly comes into play.

1. Plan to increase your emergency savings nest (you should have a minimum of $1,000)
2. Plan to increase your Retirement investments
3. Plan to pay off your debt (you can use the Snowball effect)
4. Plan to finally start that side business you’ve been mulling over
5. Finally, plan to get rid of that clunker that’s sapping your money and get that new car (your current one maybe hurting you especially if you’re making weekly trips to the mechanic)
6. Plan how you’re going to splurge as long as you’ve taken care of items 1; 2 and 3 ~ why not?

Would love to read on ways you prep for your tax filings?

Till Next Time,