Put a little extra cha-ching in your step

It’s always fun to figure out easy ways to get more money in your pocket.

So, for the new year, I decided to ask area financial planners for their favorite wealth-building tips. What I heard were some obvious and some not-so-obvious ways to put a little extra cha-ching in your step in the next 12 months.

Here are 10 ways to get more from your personal money management strategies in 2012.

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1. If your New Year’s resolution is to save more money, have a set amount deducted directly from your paycheck, said Peter Braun, first vice president, investments, and a wealth adviser at UBS Financial Services Boulder office. The more specific you are about your financial goals, the more likely you are to actually save the dough. It may sound like a no-brainer, but you’d be surprised how few people actually do it.

2. Related: Make a budget for all household expenditures, said Nancy Stevens, chairman of First Western Trust Bank, a Boulder wealth-management firm. Most people can reduce spending by about 15 percent, simply by knowing how much or little they want to spend on things like eating out, buying groceries, or going on vacation, she said.

“For most people, these are the easy places to find savings,” Stevens said. “Our experience is that people actually enjoy keeping track of their monthly spending and seeing their savings accumulate.”

3. Still related: Pay down or pay off as much of your personal debt as you can. Pay off your credit cards. As Braun puts it, “People who understand interest, earn it. People who don’t understand, pay it.”

The less debt you keep on your personal balance sheet, and the less debt you take on in the future, the better shape you’ll be in for the long haul, Braun said.

4. Have any money left over after those belt-tightening tips? You still have time to contribute to your individual retirement account, or IRA, – through April 15 for the 2011 tax year. Anyone under age 50 can contribute $5,000 per year; if you’re older, you can contribute $6,000 per year.

5. Convert your IRA account into a Roth IRA, which is tax-free. Doing so often produces better long-term results for you and your beneficiaries, according to Dave Cerullo, a certified public accountant at First Western Trust Bank. Weigh the potential future benefits carefully before you take the plunge, however – the conversion will increase your adjusted gross income on your tax form for 2011.

6. Increase the amount you contribute to your 401(k) retirement plan at work. For 2012, the maximum contribution to a 401(k) plan increases from $16,500 to $17,000, Stevens said. If you’re 50 or older, you can contribute another $5,500 to your 401(k), or a total of $22,500 before any employer match.

In addition, many companies now offer a Roth 401(k) option, which taxes the employee’s contribution when it is made, but grows tax-free until retirement, Cerullo said. Withdrawals after retirement also are tax-free. A Roth 401(k) option may seem particularly attractive for younger employees in lower income tax brackets who expect their earnings to grow in the future, Cerullo said.

7. If you have kids, you can put money away tax-free for their education. Such 529 plans are tax deferred as they grow and tax-free if used for qualified educational expenses.

8. When it comes to charitable contributions, you can actually donate stocks you own to charity instead of cash. If you donate stocks to a charitable organization, you can deduct the fair market value of the long-term capital gain property at tax time, even though your actual stock might be worth significantly less, Cerullo said. Donating stocks also help you also avoid taxes on the gain that would be recognized if you sold the security and donated the proceeds.

9. Related: It’s too late now to do this for 2011, but think about annual exclusion gifts before year-end 2012. In 2011, the amount a person could give away to family and friends before paying any gift tax was $13,000 per person. Families working on wealth management strategies for their kids can benefit big from such gifts, if they’re able to plan carefully.

10. Consult your tax adviser to look for any potential tax benefits you may have missed from your changing financial situation over the last year. Buying and selling real estate, changing jobs, moving, adding or subtracting money from retirement accounts and other life changes all can affect your tax liability.

Beth Potter can be reached at 303-630-1944 or e-mail bpotter@bcbr.com.