The start of the new year is normally a time of fresh starts in terms of one’s life, diet, or decision to make their dreams come true. There’s a determination in those first few weeks of the year’s infancy to push ahead and accomplish any decided upon resolutions. And all goes well, until the bills of the new year begin to appear in the mailbox or inbox. The influx of annual renewals, quarterly bills, and full payments to meet medical insurance deductibles can derail ones push toward their goals, leaving them despondent and unmotivated.
The beginning of a new year cycle can be financially hard on some. It could be just a few weeks in January or stretch out into several months. The way to get through this time to achieve any desired resolutions is to plan ahead, especially if some of the pending payments regularly come up. Here are a few of the most common new year bills that appear and how to keep the pain to a minimum.
Health Care Deductibles
This is probably the most expensive of all payments that come up in the new year, particularly when medical insurance deductibles are set high for both individuals and families. For example, a basic health insurance program set up can have a subscriber make full payments up to $1000 per person or $2000 per family. Others offer even higher deductibles that may take months to hit. For an individual this may not be a problem, but for a large family the bills can come fast and furious before January is done.
To avoid this, set up a health care spending account. This can be done at home by creating a category in the budget and populating it with a set amount of money for each pay. Better yet, many companies offer their employees the ability to set up some form of HCSA that is funded by automatic paycheck reductions that help lower your taxable pay. This account is normally set up when an employee chooses their health insurance for the new year.
Be it a vehicle registration, insurance premium, or HOA bill, these annual renewals come at the same time each year, meaning there should be no surprise when they appear. To prepare, start populating their budget categories the year before, making sure they’re funded before the new year begins. This avoids pulling money from the emergency fund or other sources.
On top of everything else, normal quarterly payments for various services start appearing at the start of the year. These types of bills are easier to pay through the rest of the payment cycle; however, they can be an added burden at the start of the new year. One suggestion to ease this type of monetary pain is to double up payments during the previous quarter. It may take some budgetary adjustment, but the money will be ready to dole out come January.