Education Center » Balancing Goals » A month-by-month guide to a financially healthier you

A month-by-month guide to a financially healthier you


With each new year comes a fresh start. While you’re thinking about making resolutions to improve your health, like losing weight or getting more exercise, don’t forget about your financial well-being. Wondering how you might do that? It’s not as hard as you think.


Here’s a month-by-month guide of little things you can do that could pay off big:


January: Check your 401(k) account

Take advantage of pre-tax contribution limits. In 2017, individuals can contribute up to $18,000.1 And if you are age 50 or older (or will reach the age of 50 before year-end), you may be eligible to make an additional $6,000 “catch-up” contribution.2 There are many advantages to taking this step, including potential investment compounding and potential reductions in payroll tax—don’t let them pass you by. Investing in the plan involves risk including the possible loss of the principal amount invested.

Five smart ways to “spend” your tax refund:

1) Rebuild your emergency fund

2) Pay down your credit cards

3) Boost your retirement savings

4) Build your college savings

5) Make extra mortgage payments


February: File early

By February, you should have all the documents you need to complete your 2016 taxes. So why wait until April? Complete your tax return and file now if you’re due to receive a refund. Even if you end up owing taxes, you’ll know where you stand and will be able to face the year on solid financial footing.


March: Update your beneficiaries

It’s important to decide who will get your 401(k) and other financial accounts in the event of your death. Check with your financial services providers—many now allow you to make your updates easily online. If your accounts require you to submit paperwork with original signatures, make sure you keep copies for your records.


April: Remember your IRA

Don’t neglect your IRA. You can make a 2016 IRA contribution until the April tax-filing deadline.3 And if you missed our tip for February, now is the time to file your tax return and make any necessary tax payments.


May: Get your free credit report

Visit, where you can access your reports on file at the three main credit bureaus for free. See any mistakes? Contact both the credit reporting company and the company that provided the information. You should explain what you think is wrong and why, and include copies of documents that support your dispute. For more information, visit the Consumer Finance Protection Bureau website.


June: Beware gifting season


It’s a busy month for graduations and weddings. Respect your current financial situation and don’t spend money you don’t have.


July: Face the inevitable

Confirm that you and other loved ones have the key estate planning documents: a will, a revocable living trust, and power of attorney for both healthcare and financial matters.


August: Keep back-to-school shopping in check

According to the National Retail Federation, the average family with children in grades K–12 spends more than $650 a year on back-to-school shopping—including clothes, electronics and supplies.4 And if your kids are into sports or other extracurricular activities, you’re probably spending a lot more! But you don’t have to buy everything at once. Instead, pick up a few items now and hold off on others until fall sales start.


September: Consider a 529 plan

September is widely recognized as College Savings Month, and with good reason! As kids head back to school, the topic of affording college tuition looms large for many parents. Why are 529 College Savings Plans so good? It mostly has to do with taxes. With 529s, you have to pay normal income tax on the money you put into your plan. But you don’t pay taxes on any investment earnings once they’re in the account, or when you take them out to pay for qualified college expenses. The 529 is also a very flexible tool, with low minimum contributions and high maximum contributions that can be redirected to other members of the family if the original beneficiary does not need all the money.


October: Check your 401(k)—again!

National Save for Retirement Week (typically the third week of the month) and your employer’s annual benefits enrollment period are both great times to revisit your 401(k) account to ensure your contribution amount and investments are in line with your savings goals. At the very least, be sure you’re contributing enough to get your employer’s full matching contribution (if available).


November: Prepare for the unexpected

It’s always a good idea to check in with your insurance company once a year. Failing to do so could mean you’re overpaying for coverage—or don’t have enough. And don’t limit your conversation to home and auto. For many families, life insurance makes good sense.


December: Ditch the credit cards

Shopping for the holidays? Try paying cash for everything and avoid the nasty credit card bills in January—a sure way to get 2018 off to a wonderful beginning!

Getting your financial house in order is always a good thing, but most of us don’t do it until we’re motivated by a life event like a marriage, birth or divorce. Even if you can’t get to all twelve of the tips we’ve presented here, doing just a few can put you on the path to a more successful and satisfying year.

Learn more and take action

  • If your 401(k) plan is through Merrill Lynch, go to Benefits OnLine® today to check your balance, increase your contribution amount, update your beneficiary,5 and monitor your investments.
  • Need help with your college planning goals? Visit Merrill Edge®.

Neither Merrill Lynch nor any of its affiliates or financial advisors provide legal, tax or accounting advice. You should consult your legal and/or tax advisors before making any financial decisions.

1 If your plan offers Roth 401(k) contributions, this limit applies to the combined total of any traditional 401(k) contributions and Roth 401(k) contributions.

2 If your plan offers Roth 401(k) contributions, catch-up contribution provisions apply to Roth 401(k) contributions also.

3 For 2016 and 2017, the maximum you can contribute to all your traditional and Roth IRAs is the smaller of: $5,500 ($6,500 if you are age 50 or older by the end of the year), or your taxable compensation for the year.

4 “Demand for Clothing, Supplies, Electronics Drives School/College Spending Up,”, July 17, 2014.

5 Online beneficiary updates are not available for all plans.

Merrill Edge, available through Merrill Lynch, Pierce, Fenner & Smith Incorporated (MLPF&S), consists of Merrill Edge Advisory Center (investment guidance) or self-directed online investing.

MLPF&S is a registered broker-dealer, member SIPC, and a wholly owned subsidiary of Bank of America Corporation (BofA Corp.).

Investment products offered through MLPF&S and insurance and annuity products offered through Merrill Lynch Life Agency Inc.:

Are Not FDIC InsuredAre Not Bank GuaranteedMay Lose Value
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Are Not a Condition to
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Merrill Lynch Life Agency Inc. is a licensed insurance agency and wholly owned subsidiary of BofA Corp.

Banking products are provided by Bank of America, N.A., member FDIC and a wholly owned subsidiary of BofA Corp.


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