We’ve arrived at the shortest month of the year, and with it comes a smaller, but important, list of financial chores.
You may have lost some of your New Year’s motivation to save more or spend less, but the beginning of February is the perfect time to check in and recommit to the financial goals you set for yourself at the start of the year. ‘year. So, turn your attention to taxes, taking advantage of high interest rates and talking about money with your partner. While we can’t help you with Valentine’s Day (or Palentine’s) preparations, we can help you navigate this month’s financial checklist.
Here’s how to make the most of these next 29 days.
1. Talk to your partner about finances
Okay, we know this sounds like a romance killer, but hear us out: Research shows that not only do romantic partners underestimate the value of talking about money, but also overestimate the level of negative emotions they will experience during such conversations. Even if you don’t have a special someone, a 2023 study by Bread Financial found that 55% of singles find it attractive when a potential partner is financially responsible, so you might want to listen, too.
Money issues come up in relationships more than you might imagine. When you go out, does one person always pay the bill or do you split it? Do you have parallel goals of homeownership and retirement? Have you even discussed it?
There’s a stigma attached to talking about money, especially within relationships, where silent factors like gender norms and power imbalances can covertly influence how people share financial responsibilities. But keeping quiet about big things rarely works in anyone’s favor. You don’t want to find out that your significant other has a problem with excessive credit card spending once you’re stuck in a lease or marriage. Any debt you or your partner incurs after marriage, such as a mortgage or car loan, can affect both spouses’ credit scores.
Make no mistake, we’re not encouraging you to ambush your partner about their student loan balance or whether they have an inheritance. Approach the topic gently and agree on a time when you can both have an honest (and calm) conversation about your financial situation. By honest, we mean you should be ready to talk about your debt, your spending habits (even the bad ones), and goals for the future. This doesn’t mean you have to make decisions about everything together now, but putting all your cards on the table can establish positive communication and shared understanding.
Need more motivation? Being transparent about finances with your partner has proven benefits. Engaged and newlywed couples with joint bank accounts have been shown to have significantly higher relationship quality than those who keep their money separate, according to a study published last year by Indiana University’s Kelley School of Business. . Merging accounts led to greater financial harmony for those couples, who reported greater satisfaction with the way they discuss and manage money together.
“They often told us they felt more like they were ‘in this together,’” Jenny Olson, the study’s lead author, said in a press release.
2. Buy a CD before rates drop
One silver lining of the Federal Reserve’s interest rate hikes, which have curbed inflation, has been high APYs on savings products like certificates of deposit (CDs), but time to get these attractive rates is about to expire.
With the central bank planning to cut interest rates later this year, several large online banks are already starting to lower 12-month CD rates. Barclays’ 12-month CD, for example, has now fallen to 5.3% from 5.5% last month – and Discover, Marcus, Sallie Mae and Synchrony have also cut theirs in recent weeks.
While no one knows exactly when – or how much – CD rates might fall in 2024, it is certain that they will not rise any higher than they are now. These accounts are not suitable for everyone, as they lock your money for a certain period of time. But consider this your green light to buy them now if you’re thinking of taking advantage of the current rates. CD laddering is one way to do this while keeping your savings liquid (you can learn more about this strategy from this Money story).
3. Start using your 1040
Do yourself a favor and get one of the most annoying annual financial tasks out of the way by preparing your tax return now. You’ll thank yourself later when you receive your refund before everyone who waits until the last minute to apply. (The deadline for submission is April 15 this year.)
Tax season is officially in full swing: The IRS began processing tax returns on January 29th. At this point, you should have received most of your tax documents, and if not, you should check with your employer where your W-2 is located. .
There are some changes that may make the way you file your return a little different this year: The IRS has extended free filing to taxpayers who had an adjusted gross income (AGI) of $79,000 or less in 2023 – $6,000 more than last tax season. Eligible taxpayers in select states will also be able to apply using the agency’s new Direct File pilot, which will be rolled out in phases as it undergoes final testing.
Initially, the program will only accept individual federal income tax returns. If you need to file a state return after submitting your federal one, Direct File will take you to a state-sponsored platform where you can do so. You can find out more about participating states and eligibility in Money’s handy explainer.
More from Money:
Here’s where student loan forgiveness stands after a flurry of developments
Time is running out to sign up for free government internet plans
Older Americans now own 80% of the stock market — here’s why this is a problem