Personal Finance Calendar for 2012

January 13, 2012

Key Points

• Just as financial planning is not a one-time event, it's not a once-a-year event either. Spreading out tasks throughout the year can make them more manageable.
• Following our month-by-month guide can help get your finances in tip-top shape.
• There's action you can take each month?such as obtaining your credit report or reviewing your estate plan?to keep your finances on track throughout the year.

Do you spend more time planning your annual vacation than you do thinking about your personal finances? And when you finally do get around to thinking about your finances, do you usually end up waiting until the last minute? If so, you're not alone. Admittedly, it is a lot more fun to make plans for that next big summer trip or the upcoming holidays than it is to review your health insurance options, plan for your estate, or make sure your retirement is on track. But, the effort is well worth it and can pay huge dividends for you and your loved ones over time.

At Schwab, we view personal financial planning as an ongoing, lifelong process, not a one-time event. Of course, monitoring your progress on an ongoing basis doesn?t mean you should obsess over your finances daily. You have better things to do (like planning your next vacation). On the other hand, it doesn't mean you just pull out the statements and spreadsheets once a year for an hour or two to see how you're doing and then forget about it until next year.

Just as financial planning is not a one-time event, it's not a once-a-year event either. Ideally, financial planning is a year-round exercise. After all, it doesn?t do much good to procrastinate on your tax planning until New Year's Eve rolls around and your options are severely limited (let alone, until right before the April 15 due date when it's too late to do anything but pay whatever Uncle Sam tells you to pay). If you spread things out throughout the year, it's manageable. And, with a little organization, it shouldn't be too much hassle either. Hopefully, the following personal finance calendar will help you get started:?

January ?

• Resolve to make yourself financially fit in 2012:?
  
  • Manage your debt. Start by paying off all of your high-cost, non-deductible credit cards, and then establish an emergency fund equal to 3-6 months of expenses, if you haven't already.
  • Create (or update) your cash flow statement (income minus expenses) and statement of personal net worth as you monitor your progress toward your long-term financial goals.
  • Give your portfolio a checkup?review the performance of your stocks, bonds and mutual funds as you rebalance back to your target asset allocation mix. If you're retired and drawing down income from your portfolio, combine your portfolio rebalancing with your cash flow planning for the next 12 months.
• Double-check your employer retirement plan contribution percentage. If you're at least 50 years old (or will be by December 31), consider making an additional catch-up contribution. At the very least, try to contribute up to the point where you take advantage of any available employer match.
• If you don't pay enough income tax through regular payroll withholding, file your fourth-quarter estimated income tax payment by January 15. (You have until January 17 in 2012, since January 15 falls on Sunday and January 16 is a holiday. See the for other federal tax items due throughout the year).
• Annual tax forms 1099, 1098 and W-2 should be mailed to you by your various providers no later than January 31 (February 15 for some 1099s).

February

• Check your insurance policies (property and casualty, liability, health, disability, life) to be sure you're not paying too much for the wrong kind of coverage.
• It's possible certain mutual funds could restate their distribution information after your initial Form 1099 is mailed to you at the end of January. Though not common, when such fixes are necessary a corrected 1099 is usually mailed sometime in the month of February, so this shouldn't stop you from getting a head start preparing your income tax forms. Schwab clients can access tax tools and resources on schwab.com.

March

• If you turned 70??last year and didn't take your first-year required minimum distribution (RMD) from your IRA by December 31, you have until April 1 to do so.
• Get a ?of your credit report from one of the three major reporting agencies on a rotating basis.

?April

• File your income tax return by April 15. If you're requesting an automatic six-month extension, you still need to pay any taxes due by April 15?(April 17 in 2012 because April 15 falls on a Sunday and April 16 is a Washington, D.C. holiday).
• April 15 is also the last day to make a contribution to your IRA or Coverdell Education Savings Account for the prior year.
• If applicable, first-quarter estimated income tax payments are due by April15.

May

• Create (or update) an inventory of your home and personal property. Use a video camera to make a record of your valuable possessions for insurance (and/or estate) purposes, and then store the tape (or DVD) in a secure, remote location.
• Create (or review) your financial disaster plan.

June

• Perform a mid-year review of your finances to be sure you're on track:
  
  • Double check your actual year-to-date income and expenses against your cash flow projections.
  • Are you on track with your retirement contributions and other savings?
  • Run a projection of your income taxes to be sure you are not paying too much or too little income tax (either through withholding or quarterly payments).
• Planning a June wedding? Don't forget to update your financial plan accordingly.
• If applicable, second-quarter estimated income tax payments are due by June 15.

?July

• Get a ?of your credit report from one of the three major reporting agencies on a rotating basis.
• Keep learning?add at least one good book on personal finance or investing to your summer reading list. Meanwhile, consider signing up for an?.

August

• Compare what you actually spent on vacation to the amount you projected in your annual cash flow plan. Start thinking about your holiday budget.
• As the kids or grandkids get ready for school, think about establishing or contributing to a Coverdell Education Savings Account and/or 529 College Savings Plan on their behalf.?

September

• Review your estate plan.
• If applicable, third-quarter estimated income tax payments are due by September 15 (September 17 in 2012, because September 15 falls on a Saturday).
• If you want to establish a SIMPLE IRA this year for your small business, the account must be opened by October 1.
• You have until October 15 to recharacterize a 2011 Roth IRA conversion. If you already filed your 2011 federal income tax return, you will need to file an amended return along with (check the rules for your state if you already filed a state income tax return).?

October

• File your income tax return by October 15 if you requested a six-month extension back in April.
• Run a projection of your current-year income tax liability to get a head start on your year-end tax planning.
• As open enrollment season rolls around at work, take the time to review your health insurance coverage and other employer benefits.

November

• Get a ?of your credit report from one of the three major reporting agencies on a rotating basis.
• Don't charge more for holiday gifts than you can comfortably pay for in full when the January credit card statements come around.
• Take time to give thanks for another year of financial success. Review your charitable giving program.

December

• Check your portfolio again for loss-harvesting candidates, as you rebalance back to your strategic, long-term asset allocation.
• If applicable, don't forget to take the annual required minimum distribution from your IRA by December 31.
• If you want to establish an Individual 401(k) or other QRP (qualified retirement plan) this year for your small business, the account must be opened by December 31.
• If you didn't receive your annual Social Security benefit statement on or around your birthday this year, request one from . Compare your earnings record against your old tax return info for accuracy.

As always, if you have questions or need help, please contact your Schwab consultant. If you're not yet a Schwab client but would like to learn more, a Schwab consultant can help. Call 800-435-4000 to get started.?

The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision.

This information is not intended to be a substitute for specific individualized tax, legal or investment planning advice. Where specific advice is necessary or appropriate, Schwab recommends consultation with a qualified tax advisor, CPA, financial planner or investment manager.

The Schwab Center for Financial Research is a division of Charles Schwab & Co., Inc.

Source: http://www.schwab.com/public/schwab/resource_center/expert_insight/personal_finance/financial_planning/personal_finance_calendar.html

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