From a financial perspective, Monday the 2nd and Tuesday the 3rd, are some of the biggest days of the year.
Monday, December 2nd - With 86% of Americans feeling comfortable shopping online, Cyber Monday is projected to break last year’s record by 20% or more. My advice: stick to a spending budget when it comes to Christmas in order to avoid paying for your 2019 Christmas several months into 2020, courtesy of VISA and MasterCard. Those good Cyber Monday deals will slowly, but surely, vanish if there is a high-interest credit card attached to them. Follow this link to an article from the USA Today about good deals and safe ways to shop online.
Tuesday, December 3rd – Lesser known, but very important and growing by leaps and bounds each year, is Giving Tuesday; which is also expected to break 2018’s record-setting amount. You can read about the origins of Giving Tuesday here. If everyone gave 10% of what they spent on Monday, on Giving Tuesday, this world would make big changes for the better.
Speaking of giving; keep in mind with the increased standard deduction amounts, ($12,200 for single tax filers, and $24,400 for married filing jointly), many people have lost their financial incentives to itemize their tax deductions. One tax strategy that generous, charitable-minded people should analyze, is bunching your deductions. A detailed article explaining this strategy can be found here. Essentially this strategy involves alternating taking the standard deduction every other year and bunching your deductions, such as charitable contributions and property taxes, so that they equal more than the standard deduction amount in the years you do itemize. For example: taking the standard deduction amounts on the even years and itemizing on the odd years (2019, 2021, etc.).
If bunching makes tax sense, but you are concerned about not supporting charities on an annual basis, we can help. A tool we utilize is a Donor Advised Fund (DAF) which allows you to claim the tax deduction the year the contribution to the DAF is made, but then funds can be distributed from the DAF to the public charities in future years. This article gives you a good summary of how a Donor Advised Fund works. It is advisable that these types of tax maneuvers be discussed with your tax professional, but they could help you save on taxes.
I think I know why Thanksgiving is so many Americans favorite holiday. A Pillsbury commercial currently on TV is citing that the average family only shares 37 minutes of quality time together each day. During Thanksgiving break I hope this number was much higher for most of you. My personal goal and my encouragement to you is to be intentional with your scheduling decisions to try and make quality time with your family more than just 37 minutes a day.
As always, I hope you find this week’s Weekly Market Review both interesting and informative.
Trevor N. Coe, CFP