With the carefree days of summer vacation fading fast from memory — and the rush of holiday shopping still a few months away — autumn is a great time to get your finances in order. For some people, that could mean getting serious about looking for a higher-paying, better gig (new job November, anyone?); for others, it could mean planning changes to your health insurance for 2018. And for everyone, fall is a great time to take stock of budget shortfalls so you can finally start hitting long-delayed goals.
The first tasks to tackle are essential ones you’ve put off. Still haven’t filed your taxes? Oct. 15 is the final deadline for your 2016 return, assuming you got an extension. When it comes to health care, if you’re getting a subsidy for your insurance under Obamacare and have had a change in income, gotten married or experienced another qualifying event, it’s important to update your financial information to avoid any unpleasant penalties come tax time next year.
The next step is planning for the year ahead by looking at your current spending, saving and investing habits. You’ll also want to make sure you’ve locked down your personal information to avoid any negative fallout — like identity theft — following the Equifax hack.
To that end, here are five important things you can do to get richer this fall.
1. Get paid more, either at your current job or in a new one
The best time to look for a job is when you already have one: A recent paper published in the National Bureau of Economic Research estimates that after controlling for observable characteristics, the unemployed receive job offers with salaries that are about 28% lower than people who have a job.
Fall also happens to be the best season to look look for a job. One recruiter told Monster that about 36% of the offers his firm sends out are made in the fourth quarter. The reason is cynical: The end of the year is when employers most like to spend on hiring as a means of reducing their year-end tax burden.
To that end, you may want to consider polishing up the old résumé, and applying to some more senior positions in your field before the holidays. And if you really don’t like your field, consider seeing a career counselor or doing some soul-searching to decide what kind of job you want next.
Finally, if you feel like you’re hitting a wall, you could also consider acquiring some new skills in coding, fitness or “budtending.” Or you could look into studying up to become a data scientist, which Glassdoor recently named the “best job in America” for high median income and job satisfaction marks.
2. Secure your tax refund from identity thieves
Sometimes the best way to grow richer is simply by protecting the money you have — or that is due to you — so you can pay yourself and put it to work as soon as possible. And given that the personal information leaked by Equifax included social security numbers, it’s a good time to take some steps to safeguard your identity and credit.
At the very least, you should change your passwords and consider placing a “credit freeze” to prevent thieves from opening new lines of credit in your name. You also may want to take some steps to protect your tax refund.
The easiest way to do that is by filing your taxes early in 2018, so a scammer doesn’t beat you to the punch and nab your refund. “If you can file early it’s a great thing to do, particularly if you think you may be entitled to a large refund,” Jeffrey Levine, director of financial planning at New York-based BluePrint Wealth Alliance said. “It becomes a little bit more valuable now that we’re in a heightened risk environment.”
Another trick is to reduce the amount of money your employer withholds from each paycheck. That makes your tax refund smaller, which will limit the amount of money a scammer can steal from you if they do try to pocket your refund. Plus, there’s a smart financial case for getting a smaller refund.
3. Take a cue from behavioral economics
You probably know that if you’re frugal, your wallet will thank you — but a new study from researchers at the University of Illinois sheds light on how a “wait and see” approach to purchasing decisions pays off in more ways than one.
The study analyzed the relationship between 400 farmers in Nicaragua, as they weighed whether or not to sell their produce to Walmart when the retailer expanded into the country. It then tracked their sales over the next eight years.
What they found was that so-called “early adopters” — farmers who were quicker to begin selling to Walmart — ended up bearing more of the expansion’s costs than the farmers who waited to see how the other farmers fared. As the expansion continued, Walmart rejected less fruit and started paying a better price.
Essentially, early adopters subsidized the cost of Walmart’s expansion while the later adopters were able to learn from everyone’s mistakes getting, as lead researcher Hope Michelson put it, a “free ride on the information provided by those early adopters.” Economists call this “strategic delay.”
To apply that thinking to your own life, build in a forced waiting period before you make any big purchase, whether it’s the new iPhone or a new couch.
If you’re lucky, the price might drop while you wait or you may figure out a way to get a better deal elsewhere while you wait. Time and again, evidence suggests taking a long-term view tends to pay off.
4. Rethink your approach to risks
Risk tolerance, an investment term that essentially describes how much we can watch the value of our retirement accounts rise and fall without becoming so nervous we act rashly — appears to be a major determinant of retirement outcomes. Alas, there’s widespread evidence that young people today are risk-averse to a fault.
Simply avoiding investing in the stock market, for example, could cost a retiree more than $3 million over the course of a career. And one reason why women have lower net worths relative to men — aside from the fact that they are still paid far less — is that they’re more likely to have their money tied up in low-risk investments, according to a paper from researchers at the University of Missouri.
“Men are more likely to say ‘I want to take above-average risk,’ and then you see that difference in their portfolio choice as well, women have more conservative portfolios,” said Rui Yao, a professor of financial planning and author of the study. “But [women] live longer, they need more money, so if they want to maintain their living standard after they retire, they should actually invest in more risky assets.”
Of course, it is not just women or young people who need to heed this warning.
Figuring out the right balance of risk and reward is a really hard thing for investors to conceptualize, said Paul Bennett, a certified financial planner and author of The Money Navigator, but particularly so for today’s young savers who have never lived through a stock market crash.
“There are trade-offs on every strategy,” Bennett said. “But people probably overestimate how risk tolerant they are; they probably think they are more tolerant than they are.”
The best ways to solve this problem? Use the risk assessments from robo-advisers to get a sense of what sorts of investments people with your risk tolerance usually have. Also remember that the earlier you start investing, the more likely it is you can take bigger risks with assets like stocks — though Yao said the proportion of risky investments you hold should shift over time.
5. Turn your hobbies into cold, hard cash
In the early days of fall, it can be hard to shake off that summer mindset and get back into the swing of work: The days are getting shorter, not longer, and without long weekends to look forward to, your workplace motivation may be starting to wane.
If that sounds like you, you might consider taking up a hobby, according to a new paper from researchers at the University of Toronto. They found that human motivation does not actually decline throughout the day, as previously thought — as long as you don’t spend the day doing the same exact activity.
“People get tired of doing one specific task over a period of time,” said Dan Randles, a postdoctoral fellow who worked on the study, in a press release. “[But] we found no evidence that they had less motivation or ability to complete tasks throughout the day.”
That would suggest there’s a strong argument for trying to squeeze in an extra coffee break or two during the day, talking to your boss about taking on some new responsibilities at work or even picking up a new hobby.
If the hobby involves a creative pursuit, it might be able to pay off in more ways than one: Close to 30% of side-hustlers are involved in some sort of creative endeavor, according to Finder, making an average of about $3,075 in extra cash each year.
Need more inspiration? Check out our roundup of ways to become an actual millionaire.
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