RALEIGH-- Many us are stepping back and taking a deep breath after a week of intense shopping. From Black Friday to Cyber Monday and Giving Tuesday, money has been flowing out of our pockets in record numbers this year.
But is all that shopping breaking the bank? Financial experts say that doesn't need to be the case if we just take extra steps and become more mindful of our spending habits. Spectrum News anchor Caroline Blair sat down with Certified Financial Planner and founder of Steward Wealth Strategies, Brant Spesshardt, for a look at the steps we should take. The company offers the following tips:
Shopping Strategies - Prevent overextending yourself with the following tips:
Be organized before the holidays arrive. You can discover the satisfaction of getting the most value for your dollar, leaving you free to enjoy a stress‐free holiday season.
1. Shop early in the season, especially at off‐peak hours and during sales. This prevents last‐minute panic purchases made in crowded stores.
2. Payment by cash or check can help you shop within your means and prevent credit card surprises.
3. A name exchange or grab bag among friends and family members—with an agreement on dollar limits— eliminates the pressure of buying too many gifts.
4. Pooling funds with friends and family members to buy something special for one person can turn an expensive idea into an affordable gift.
5. Discount stores can be a paradise for “stocking stuffers.”
6. Keep an envelope or folder for receipts and sales slips of all purchases and their recipients. This can expedite any necessary returns after the holidays.
7. Be creative in making gifts and cards. Personal, hand‐made gifts are often more special than the storebought variety.
8. Consider a gift of helping with/planning for long‐term care needs for aging family that may not need another Hummel or other material gift.
Charitable Giving: We make a living by what we get, but we make a life by what we give.
Everyone is in a position to give something.
1. Money – One‐time, large gifts can strain finances. Consider giving via installment plans or gently used items.
2. Old Clothing ‐ When you give four bags of old clothes to a charity, you may receive a receipt. But, the value of those old clothes as a charitable tax deduction is left up to you to determine. The Internal Revenue Service (IRS) has tried to eliminate most of the guesswork by stating that you may deduct the current fair market value (FMV), or whatever the clothes would fetch at a used clothing outlet.
3. Household Items ‐ must be in “good condition” in order to qualify for a tax deduction. Bear in mind that non‐cash contributions exceeding $5,000 require a qualified, written appraisal within 60 days of the date of gift, and you must submit the appraisal when filing your taxes.
4. Used car or other vehicle ‐ If the vehicle is assessed at a value between $500 and $5,000, the size of the deduction depends upon what happens to the vehicle after the charity has received it.
i. If the charity sells the car, your deduction is limited to the exact amount of the sale price.
ii. If the vehicle is used by the charity then a fair market value may apply.
iii. If the charity sold the car to a “needy individual” at a much lower price than the actual value, OR if the organization makes a “material improvement”— enerally, reconditioning work that is more than routine or cosmetic—before selling the vehicle fair market value may apply.
5. Get a recipient that specifies the amount and date of contribution, as well as the name of the charity.
a. A canceled check for a donation of cash no longer suffices as a receipt in the eyes of the IRS.
b. In addition, the donation statement from the charity must specify whether any considerations (e.g., meals, clothing, concert tickets, trips, or books) were given in exchange for the contribution Your tax deduction will be reduced by the amount of the consideration.
c. While receipts and other acknowledgments are not filed with your annual federal income tax return (Form 1040), these should be carefully stored with other tax documents for the year in which the donations were made. As a general rule of thumb, you should hold onto tax records for at least six years.
The information being provided is strictly as a courtesy. Although the information has been gathered from sources believed to be reliable, it cannot be guaranteed. This information is not intended to be a substitute for specific individualized tax or legal advice. Neither FSC Securities Corporation, Steward Wealth Strategies, nor its registered representatives, offer tax or legal advice. As with all matters of a tax or legal nature, you should consult with your tax or legal counsel for advice. Securities, insurance and investment advisory services offered through FSC Securities Corporation, member FINRA/SIPC and a registered investment adviser. Additional insurance services offered through Steward Wealth Strategies, not affiliated with FSC Securities Corporation. Working with an advisor that is part of the SmartVestor Pro network cannot guarantee investment success or that financial goals will be achieved. There can be no assurance that working with a SmartVestor Pro will produce or achieve better results than working with an advisor not affiliated with the SmartVestor program. Advisors pay a fee to belong to the SmartVestor program. Dave Ramsey and the Dave Ramsey SmartVestor Pro program is not affiliated with FSC Securities Corporation and is not sponsored or endorsed by FSC Securities Corporation.