A 8-Step Course for Your Personal Finance from CNNMoney

As we entered the last quarter of 2006, there are some articles recently offering advices on how to get your personal finance in order at the end of the year and be prepared for 2007. For me, there are at least three things I plan to do for our investments before year end:

• Rebalance both taxable and tax-deferred investment plans;
• Max out 401(k) and Roth IRA contributions;
• Add money to 529 plan;

Today, there is another piece from CNNMoney that offers a 8-step course:

1. Rebalance your 401(k): Rebalance to keep each asset class within its target allocation, but don't make any upside-down change.
2. Revisit your estate plan: Review your will, add any new property, check your giving plan, and make sure that your guardianship plan for your kids still makes sense.
3. Sock it away: Maximize your IRA contributions and keep cash in high-rate accounts which are not difficult to find.
4. Give smarter: Keep a list of items you donated or want to donate and assess the fair values of your non-cash donation; otherwise, you may pay more penalty for overstated your donation under the new pension law.
5. Review your health plan: Be sure to sign up the flexible-spending account when you renew you health care plan.
6. Clean up your taxable account: Dump some hopeless losers before the year end to offset capital gain/dividend incomes that will be taxed. Best of all, the loss can be carried over into 2007. But be aware of the wash-sale rule.
7. Do a property insurance checkup: Don't be under-insured!
8. Check the new credits and taxes: New "kiddie tax" rule: for kids under 18, their annual investment income will be taxed at their parents' rates if it's above $1700.

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