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The Best Last-Minute Money Moves for 2012

Kimberly Palmer

The countdown to New Year's Eve is already underway, which means there's less than a month left to make some final financial moves in 2012. So, how best to make improvements across all the big financial categories of your life? Here's your step-by-step guide:

Give yourself a career upgrade. First, take some time to reflect on how your work has changed over the last 11 months. Are you earning more or less than you were in January 2012? Has any change been by choice, or did you face some unexpected circumstances? If you're still recovering from a setback, such as a lay-off, then create a plan for yourself to find your footing again in 2013, starting with creating an additional source of income. If you have a skill, such as playing a musical instrument, cooking, or speaking a second language, consider teaching others on the side, for example.

Track spending. If you haven't yet conducted an in-depth analysis of where your money is going, the end of the year is a great time to do so because you can look back over the entire year. And as research has shown, that's the most effective way to budget because it's harder to forget big annual expenses, such as summer vacation or holiday gifts. Thanks to easy-to-use websites like (or your own bank's online interface), you can upload and analyze spending in less time than it takes to watch a movie.

Save up. If you haven't maxed out your retirement savings for the year ($17,000 for a 401(k), or $22,500 if you're 50 or older), you have until April 15, 2013, to do so. Non-retirement savings are easy to forget, especially this time of year when holiday travels and shopping can cloud longer-term goals. But if you have big ones for 2013 and beyond, such as buying a home or building a hearty emergency savings account, now is also the time to think about prioritizing after-tax savings, too.

[Read: Should You Save or Pay Off Debt?]

Lower your fees. Particularly on any long-term retirement accounts, expenses can take a big chunk out of your investment return. But fees vary widely, typically from 0.1 to 2 percent of your total investment on an annual basis. Think tank RAND calculates that even just 1 percentage-point difference in annual fees adds up to $3,380 after 10 years on a $20,000 account balance. Index funds often offer lower fees, which means investors can keep more of their money.

Make a plan to conquer big goals. BJ Fogg, director of Stanford's Persuasive Technology Lab, suggests taking small steps instead of big ones. "Big leaps almost never work," he says. They can be overwhelming and doom people to failure. Instead, Fogg says you should first think about what your goal means in terms of a behavioral change. Do you need to start bringing your lunch to work? Avoid budget-busting restaurants? Or set up an automatic payroll deduction that goes into a savings account?

Coordinate with your partner. Not talking about money is one of the biggest money mistakes couples make. Getting set for the New Year by brainstorming about big money goals is a great way to close out 2012. Do you want to pay off debt together, save for a house, or cut back on some area of spending? Agreeing on common goals makes it easier to save. In The Debt-Free Spending Plan, JoAnneh Nagler explains that working together on a spending plan can be an aphrodisiac, since it reduces daily stress. "You don't think that would make you feel more amorous and sexy, but it does," she says.

[Read: 7 Items You Should Buy This Winter.]

Automate savings. Many banks make it easy to sign up to automatically deposit savings into your account every month, and you might even be rewarded for it with extra interest points or lower fees. Your employer might also be able to set up automatic deposits for you, so you don't even miss the money. Be aware, though, of potential tax changes that could also lower your take-home pay in 2013.

Revamp your passwords. Don't let online predators stump your style in 2013. Give yourself foolproof passwords by following some basic rules: avoid words you'd find in the dictionary, use a mix of numbers and letters, and create long passwords, perhaps incorporating acronyms for sentences that are easy for you to remember. Also, change passwords to important accounts, including financial ones, every few months.

Up your insurance policies if necessary. If 2012 saw you through any major life changes, such as a home purchase, marriage, or children, you might need more insurance. In fact, many people are under-insured, which can put their dependents at risk. Let the holidays inspire you to review your current policies and see whether you need to take steps to further protect your family. Since employer-provided coverage doesn't stick with you if you move or lose your job, it's important to double-check that you have enough outside coverage, too, says Carmen Wong Ulrich, president and co-founder of ALTA Wealth Management.

[Read: 50 Smart Money Moves.]

Empty out flex-spending accounts. Many flex-spending accounts that are offered by employers, including those for healthcare costs, commuting costs, and childcare costs, come with a use-it-or-lose-it policy. That means if you set money aside, now is the time to gather those receipts and file for reimbursement. (Some policies give employees until March 15 to file.)

Give generously. With tax breaks for charitable contributions potentially on the chopping block amid the fiscal cliff negotiations, you still have time to donate (and deduct) in 2012. Websites such as make it easy to research nonprofits before writing a check.

With these items ticked off, you can ring in the New Year with a little less on your plate.

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