Start 2014 on the right financial footing by learning smart ways to save money. Your bank account will thank you all year long.

By Stacey L. Bradford

1. Pay down debt. Between gift buying, multiple trips to the grocery store and extra entertaining, most of us overspend during this time of year. "Often people are afraid to even look at their credit card statements after Christmas," says California-based Ginita Wall, cofounder of, a financial education website for women. Help those balances reach zero by monitoring your expenditures and finding a few areas—say, entertainment, groceries and clothing—that you can temporarily trim by 10 percent. Then take that extra cash and begin paying off the card with the lowest balance first. Also, consider exchanging unwanted gift cards on websites such as or

2. Give smart. Stay in the holiday spirit by creating a charitable goal for the year. "Plan in advance how much and where you'd like to donate," says Patricia Powell, a financial planner in Martinsville, New Jersey. Earn a tax deduction by cleaning out your closets and giving clothing and household goods to charity. If you leave items at an unattended drop box, keep a written record of your gift and estimate the fair-market value. Check out Goodwill's donating guidelines (

3. Plan ahead. The more you put away for your kids' education now, the less you and your children will owe in loan interest later. Plus, if you contribute to a 529 college savings plan, you may qualify for a state tax break. A handful of states offer a deduction on your contribution; check out for details. Even if there aren't any local tax incentives, the investment grows tax-deferred and qualified distributions are tax-free at the federal level.

Save Money on College

4. Call your doctor. Health insurance isn't cheap, so make sure you're getting its full value. Keep track of your deductible and once you've reached it, schedule doctor's appointments and procedures (check that they'll be covered). If you're considering elective medical expenses—for instance, Lasik surgery or braces for the kids—try to schedule them in the same year. The IRS allows taxpayers to deduct medical expenses not covered by health insurance when they exceed 10 percent of adjusted gross income. It's not easy to reach that number, says Thomas DiLorenzo, senior manager, Employee Financial Services, EY, but with planning you may be able to take advantage of this write-off.

Save Money on Insurance

5. Use it, don't lose it. If there's cash left in your 2013 health care Flexible Savings Account (FSA), don't assume it's a lost cause. Some plans allow you to spend your contributions until March 2014, so check with your administrator. If you don't have an FSA, sign up for one when your employer next offers open enrollment. These accounts save you money by allowing you to set aside pre-tax dollars for medical expenses ranging from office visit copays to contact lenses and glasses. The downside is that unused funds don't roll over to the following year, so you have to guesstimate how much to put in the account.

Tackle your taxes. Don't wait until April to start working on your income taxes. Start now by setting aside all year-end documents, including W-2s, 1099s and bank statements, says Wall. Collect all your charitable receipts and organize any business expenses that you plan to write off.

Originally published in the January 2014 issue of Family Circle magazine.