PERSONAL FINANCE: Some year-end matters to consider

In the last column we promised that we would continue to look at the stock market to see if there was any discernable indication that the declaration by the news outlets that Joe Biden was the president-elect would move the markets. As I write this column, the Dow is over 29,100, which is good for those with a portfolio, but there are too many things that happened since that declaration to be able to say what, if any impact, the apparent result of the presidential election is actually having. The announcement that Pfizer may have a safe and effective Covid–19 vaccine, the exploding cases of Covid-19 nationwide and the many new restrictions in various jurisdictions, the failure of the President to concede, the prospects of a divided government, the end of the earnings season, the lack of a stimulus bill -- shall I go on?

That said, all the investment advice that I am hearing continues to be basically like this Bankrate.com advice to investors:

1. Don’t get caught up in a rising or falling market.

2. Put investing before politics.

3. Think long term.

4. Your performance depends more on you than a politician.

5. Commit to do nothing.

On a different subject, Dec. 31 is on the horizon, which is the end of the 2020 tax year for individuals. Just like I try to avoid giving investment advice, I try not to give tax advice, other than pointing out some general things, encouraging readers to continue to work with their individual financial and tax advisors.

That said, there are two things to note. First, if you have been receiving unemployment this year, that is taxable income, so if you did not withhold from the payments, you need to focus on that now. Second, under the CARES Act, even if you do not otherwise itemize, you can still claim a deduction for charitable gifts, made in cash, of up to $300. This is a new deduction under the Act.

On another subject, even though a recent report by WalletHub indicates that almost one in three people are foregoing holiday gifts this year due to COVID-19, and one-fifth of consumers will spend less on holiday shopping this year than last year, I have been putting together a list of possible holiday gifts for this year that you might not have considered in the past. Here is what I have so far: 1. a freezer; 2. a bicycle, if you can find one; 3. home gym equipment; 4. CASH – we all need as much flexibility as possible; 5. A session with a fee-based financial planner; 6. an outdoor, safe “experience,” perhaps a lesson in a new sport.; and 7. a gift to their favorite charity, and you can also take advantage of that CARES Act deduction. I will keep working on my list.

On another different subject, for most of us, we have been forced by the pandemic to live “simpler lives,” including eating more at home, less attending and participating in sporting events, and spending less on clothing and other things that we have found we don’t need as much. Also, as we have been spending more time at home, and looking around more, many of us have been weeding out a lot of “stuff” that we have accumulated over the years that we don’t wear, use, or even look at and enjoy any more. It got me thinking about “Minimalism.” It is a movement/way of life that we have all heard a little about, but probably don’t know much about, so I did some research.

On becomingminimalist.com, Joshua Becker answers the question "what is minimalism" this way. Minimalism is owning fewer possessions. It is intentionally living with only the things I really need –- those items that support my purpose. I am removing the distraction of excess possessions so I can focus more on those things that matter most.

Here are a few other thoughts from Joshua.

-- Modern culture has bought into the lie that the good life is found in accumulating things – in possessing as much as possible, and that more is better. Minimalism seeks happiness elsewhere. It values relationships, experiences, and soul-care.

-- Our world runs at a feverish pace. We are too hurried, too rushed, and too stressed. We work long, passionate hours to pay the bills, but fall deeper into debt every day. Becoming a minimalist slows down life and frees us from this modern hysteria to live faster. It offers freedom to disengage. It aims to remove the frivolous and keep the significant.

There are a number of books available about minimalism, including “The More Of Less” by Joshua Becker, and “Slow: Simple Living for a Frantic World.” On decluttering there is “Decluttering at the Speed of Life.“ Many of us are reading more these days. One of these books might be a good investment.

Let’s finish up with some decluttering tips from minimalismmadesimple.com. 1. Start by decluttering one room at a time, starting with the one that bothers you the most. 2. Get rid of anything broken. 3. I love this one – eliminate unworn clothing. A good rule of thumb is that if you have not worn the item in a year, it’s just taking up space in your closet. If you don’t like the way you look in it, if it no longer fits, or you forgot you had it, and haven’t missed it, get rid of it.

Here are a few more. 4. You don't need to get rid of anything you love and wear often, but you probably don't need 30 pairs of shoes. 5. Get rid of doubles. If you have three pizza cutters, four whisks, and eight wooden spoons, you have some room to do some eliminating, and do you really need 50 coffee mugs? 6. This may seem counter-intuitive given our buying habits during the pandemic, but, reduce toiletries. If you have 15 different shampoos, stop buying shampoo for a while, and just have one backup.

Please, have a safe and smart Thanksgiving.

John Ninfo is a retired bankruptcy judge and the founder of the National CARE Financial Literacy Program. Find his previous weekly columns at http://www.mpnnow.com/search?text=Ninfo or at http://www.monroecopost.com/search?text=Ninfo.

This article originally appeared on MPNnow: PERSONAL FINANCE: Some year-end matters to consider

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