Make These 12 Smart Money Moves in October

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Where are you going with your money?

Whatever your goal, you’ll need a plan to achieve it. “A goal without a plan is just a wish,” Antoine de Saint-Exupery, the French pilot best known as the author of “The Little Prince,” is often-credited with saying.

October is National Financial Planning Month, a good time to give your existing plan an annual checkup or get going on a plan if you have none. Maybe your situation changed due to marriage, divorce, children or career. Even if not, this is a good time to examine your progress and your goals, and perhaps to set new goals.

Here are 12 moves to make, whether you have a plan or need to make one.

1. Get started

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Most of us have just a few sources of income — jobs, interest and dividends or support payments, for example. But we have many ways to spend. That makes it tough to track your money.

You can use spreadsheets, apps, or pencil and paper to keep track of your money coming in and going out. How much did you spend on food at home or out? On transportation, rent or mortgage, utilities, clothes, entertainment, health care, donations? How much on paying back student loans or credit card debt?

The digital age has made it so much easier to keep track than it used to be. Our favorite tool is You Need a Budget (YNAB), an app that registers your outlay and what you’re spending money on, as it automatically measures progress toward your goals. (Here’s how it works.) But there are plenty of others you could choose, like Mint and PocketGuard. They’re all a little different, so see which one suits you.

2. Focus on the future

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How far ahead do you think about your money: A week? A month? Five years? Kids’ college? Retirement?

The further ahead you think, the more money you’re likely to save, one study says.

On average, people earning $50,000 a year who looked far ahead — to retirement, for instance — saved more dollars than those making $100,000 but didn’t think much about the future, says Sarah Newcomb, behavioral economist at Morningstar.

Ask yourself, “What do I want my life to look like one month, one year, one decade or longer from now.”

3. Pay yourself first

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You can’t take care of others if you don’t take care of yourself, financial planners say.

Have part of your paycheck routed directly to a savings account. And jump on the chance to participate in your employer’s 401(k) or other retirement savings plan, if one is offered.

If you wait until you’ve paid the rent, power and cable bills and hit the supermarket, and then maybe help your adult children or parents, or splurge on dining or clothes, you’re unlikely to have money left for savings.

4. Build your emergency fund

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If your car suffered a $400 breakdown tomorrow, would you have the cash to fix it without borrowing? What if you lost your job? Do you have enough to live on while finding a new one?

Many financial planners recommend building a cushion of three to six months of basic living expenses. That includes electricity, heat, water, rent or mortgage, car payments, food, insurance and debt payments and probably internet access. But not theater tickets, Netflix, gym memberships or an evening at your local brewpub.

Also, make your emergency fund work for you. Instead of keeping money in a savings account where it earns so little interest that you lose ground to inflation, let it grow at a slightly higher rate — in a certificate of deposit or low-risk, easy to sell stock or bond mutual fund.

5. Review your insurance


Insuring against the unexpected, such as a disability or accident, not only protects your family finances, it also may help reduce the size of the emergency fund you need.

Check your cost for premiums and look into the adequacy of your life, health, auto, homeowners or renters and other policies. For ways to save on every type of insurance, check out this article.

6. Check your credit

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Credit reports affect your financial life in many ways. They play a role when you apply for mortgages, credit cards, rental housing and even jobs. Keeping an eye on your credit report also may help you spot signs of identity theft.

Lenders combine your credit score with information in your credit report to assess your risk as a borrower. Generally, the better you look as a borrower, the less interest you’ll pay when you borrow money.

The first step in improving your credit score? Learn where you stand by checking your report, free of charge, once a year at

When you get a copy of your credit report, search for any errors or discrepancies between your own records and the report. If you find errors, work on getting them corrected. Find instructions for disputing errors at the websites of the three credit reporting agencies — TransUnion, Equifax or Experian — that issue credit reports.

7. Review your investments

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If all you have to review is perhaps a savings account, start by learning about the most common investments: stocks, bonds and cash.

Financial planners can help you plan your investments. As you make investment decisions, consider:

  • Your risk tolerance.
  • Your time horizon (how much time you have to meet your goals).
  • How hands-on you want to be managing your investments.
  • Minimizing investment fees.
  • Diversifying your portfolio so if one sector of the economy tanks you’ll have investments in areas that are still strong.

Those who aren’t interested in becoming investing experts often choose mutual funds as a way of owning stocks. Money Talks News founder Stacy Johnson prefers index funds of stocks, like those that track the S&P 500, for higher long-term returns without the costs associated with managed funds. In this video he explains why.

If you’re already invested, it’s a good idea to review your selections to be sure they still accurately reflect your risk tolerance and time horizon.

Wondering how to diversify your investments? Stacy recommends this approach:

  1. Subtract your age from 100 and put the result as a percentage of your savings into an S&P 500 index fund (If you’re 60 years old, subtracting 60 from 100 leaves 40, so put 40 percent of your savings into index funds).
  2. Take what’s left — 60 percent, in this case — and put half of that (30 percent) in a cash fund, like a money market fund.
  3. Put the remaining 30 percent in a bond fund.

8. Perform a tax checkup


You might be able to reduce your tax burden with these strategic year-end moves.

  • Max out your traditional 401(k) or workplace retirement plan by Dec. 31. The basic limit on elective deferrals in 2018 is $18,500, the IRS says. This move offers a potential tax savings of over $4,000, depending on your tax bracket. If you are 50 or older, you can contribute an extra $6,000, for a maximum retirement plan contribution of $24,500.
  • No 401(k)? Use an IRA. In 2018, you can contribute up to $5,500 — $6,500 if you are over 50 — tax deferred, to a traditional IRA.
  • Check your withholding. Use the IRS’ free Withholding Calculator to do a quick “paycheck checkup” — extra important this year because of tax law changes for 2018.
  • Capitalize on health savings accounts (HSAs) associated with high-deductible health insurance plans. Make sure you are contributing the 2018 maximum: $3,450 for individuals, $6,900 for a family, plus an extra $1,000 if you are age 55 or older.

9. Trim debt

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Smart habits can help you reduce debt and improve your finances to reach those goals.

If you’re struggling with payments for credit cards, payday loans, pawn shops, car title loans, student loans, mortgages or other debts, you’ll find help in our Solutions Center. Our partner may be able to match you with services you can use.

Or choose do-it-yourself debt destruction by making a list of your debts and paying them off according to one of these plans:

  • Approach #1: List and pay debts by interest rate: Start with the debt with the highest rate and work down the list. This method has the potential to save you the most money.
  • Approach #2: List and pay debts by their outstanding balance: Pay off your debts with the smallest balance first and work your way from small to large. This method may be more satisfying — you can see progress quickly and stay motivated.

Learn more from: “7 New Ways to Destroy Your Debt.”

10. Look to 2019 — and beyond

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Review your legal documents and beneficiary designations. Update your will and any trusts, retirement plan documents, life insurance policies and living wills. It may seem indelicate, with Christmas holidays coming up, but family gatherings can be the right time to discuss what to do if you, your parents or other loved ones can no longer make decisions.

Consider designating someone to make medical decisions and someone to have power of attorney for financial matters.

If you want to put these legal structures in place, consider the DIY approach: You can get create many standard legal documents for free through our partner Rocket Lawyer.

11. Get the right help

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You may want a professional financial adviser to help create a path for achieving your financial goals. Learn about finding a trusted adviser in this Money Talks News story. Some advisers specialize in retirement or estate planning. Others focus on specialized money matters — homebuying readiness, for example.

Some experts suggest choosing a fee-based adviser, to keep your interests at the forefront. Commission-based advisers may have an incentive to sell specific financial products. One key term to look for is “fiduciary financial adviser.” Such advisers are required to put your financial interests ahead of their own. Search for “Certified Financial Planners” and verify their credentials here.

12. Educate yourself

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At least once a year, ask yourself: What am I doing to establish and meet my financial goals?

“Investing isn’t rocket science,” says Money Talks News founder Johnson. You can read articles at to learn more about investing and managing your investments.

Share your financial journey and your investing approach with Money Talks News readers — in comments below or on our Facebook page.

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Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

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