There are a few days left until the end of the year and it would be a shame to forget to keep track of your own finances and catch up on any backlogs due to the Christmas rush. Thanks to this, you can save or earn amounts in the order of thousands of crowns. “It is a good idea to check the status of all accounts that clients have with banks, savings banks or insurance companies, and above all to check whether they will draw maximum tax reliefs or state contributions for the given year,” says Dušan Šídlo, an analyst at Broker Trust.
Take a look at some tips on what you can keep an eye on financially in the last days of the year.
Building savings
In addition to paying the account maintenance fee, the condition for obtaining the maximum state support of CZK 20,000 for building savings is an annual deposit of at least CZK 20,000 – i.e. CZK 1,667 per month. Money can also be deposited into the account in a lump sum. If clients have been saving less during the year and now have money to spare, it is the right time to increase their deposit so that they do not lose state support. The money must be credited by December 31, especially when paying by postal order, it is necessary to send the money in advance.
Some of them are setting up completely new contracts at the end of the year. “When someone decides to set up a building savings account at the last minute in order to be able to draw support for the current year, they must give themselves a sufficient time reserve and not wait for the last week of the year. It takes time to transport the contract to the headquarters of the building society, to check the data in the contract, if important information is missing, it is necessary to send a correction, and to enter the contract into the system,” warns Dušan Šídlo.
Saving for retirement
Anyone who saves for retirement as part of supplementary pension insurance or supplementary pension savings can deduct from the tax base the amount they save in excess of CZK 12,000 per year, but the maximum deduction is CZK 12,000. To reach this limit, it is necessary to deposit CZK 24,000 into the account during the year. The amount can also be paid in a lump sum as an extraordinary deposit with most pension companies. The money must arrive in the account by December 31.
“If the client is not sure how much he has saved during the year because, for example, he has changed the amounts he sent to the account, the current balance of the account will be determined by the pension company or the financial advisor who arranged the contract for him,” says Dušan Šídlo.
Donations and taxes
Tax relief next year will be given to those who donate money to education, culture, ecology or charity by the end of December, whether they are entrepreneurs or employees. They can deduct the value of donations up to 10 percent from the tax base. Anyone who donates blood by the end of the year will deduct CZK 2,000 from the tax base in their next tax return.
Expiry of vouchers
It is worth going through vouchers and vouchers from employers or merchants and keeping an eye on their validity, which often ends on December 31. For example, if more people use discount vouchers in December, it may happen that the services to which they apply will be booked for a long time. A different problem is faced every year by thousands of people who still receive meal vouchers at work in December, which expire in the same month. Although some merchants still accept invalid meal vouchers during January, these are only exceptions and cannot be relied upon.
Update Fuses
Insurance contracts should correspond to the current state of affairs. For example, if you renovated your house or apartment during the year, you should also adjust your insurance policy accordingly so that your property is not so-called underinsured.
“An unupdated insurance contract may cause the insured to receive less benefit from the insurance company than the value of the reconstructed property or newly equipped household,” says Dušan Šídlo.
Plans for next year
Set realistic financial goals now that you want to achieve next year. Take into account your previous income and expenses, according to which you can create a budget and save more easily while sticking to it. One of the best resolutions is to enter the new year with the intention of paying off debts. As a rule, the borrower should first repay the loan with the highest interest rate or the one that can repay the fastest.
“If someone is wondering how to create a financial plan that takes into account their regular income, expenses and goals, they should contact an experienced financial advisor who can put together such a plan,” adds Dušan Šídlo from Broker Trust.