Early birds

The clock is running out on 2008. Don’t let it expire without taking a hard look at your finances.

Sure, it hasn’t been the kind of year that makes you want to scrutinize your accounts. But it’s a crucial time to do so, on a variety of fronts – from taxes to investments to setting resolutions to improve your spending habits.

Many of the big decisions looming right now involve taxes. Though you may not have to file for up to four months, Dec. 31 is the deadline for getting expenses, income or losses onto the books for tax purposes. This year, given the stock market’s horror show, there are some particularly big choices to be made there, financial experts say.

But it’s also a good time of year for a top-to-bottom review. If you don’t have a household budget, Jan. 1 would be a nice time to start one. If you’re struggling to control spending on a certain item, the new year is as good a time as any to set yourself a new goal.

Here is a roundup of end-of-the-year advice from financial counselors and news services.

Harvest losses in the stock market

For some people – those with money in taxable investments – this may be the single biggest suggestion of all.

“Especially this year, one of the No. 1 things you want to be looking at is maximizing your capital losses,” said Mark Vickerman, president of Vickerman & Driscoll Financial Advisors Inc.

This doesn’t apply to tax-deferred accounts like a 401(k). But if you’re invested in mutual funds, exchange-traded funds or other stocks, and took a big loss this year, you might be able to get Uncle Sam to help cover some of it. You can deduct $3,000 of any capital losses against your income when you file your taxes. And if your net capital loss is greater than that, you can carry it forward to future years, to be used to offset capital gains or to again be deducted against income, up to $3,000.

Vickerman said his firm works with clients to sell off losing stocks but stay in the market.

Max out your spending plans

If you’ve got a flexible spending plan, make sure you’ve used up all the money you set aside before the deadline. (Some deadlines extend past the end of the year.) And if you’ve got a health savings account – which carries over from year to year – make sure you’ve maxed out on contributions, Vickerman said.

If you’ve satisfied your health insurance deductible and know of some upcoming expenses, try to squeeze them in before the clock resets on your deductible.

Take a look at your mortgage

Interest rates are low, and may go lower. Right now, rates for a 30-year fixed mortgage range as low as 4.75 percent, Vickerman said, though they also reach as high as 5.6 percent. He said his general guideline is that refinancing pays off if the new rate is 1 percent or more below what you’re paying now. Some people refinance for a smaller difference, but he argues that’s a bad idea because the amortization clock starts all over again after a refinancing. That means you’re back at the start of the repayment cycle and almost all your payments are again going toward interest, not principal.

Hang in there

If your estate is worth more than $2 million – granted, that’s not most of us – it’s worth your while to die in 2009, not 2008. The exemption for the estate tax rises from $2 million to $3.5 million next year.

Help your score

Now is no time to let your credit score slip. Lenders are raising their standards, requiring better scores for deals that would have been much more widely available only recently. So don’t let the holidays trip you up – avoid going deeper into debt, and don’t open new accounts. And if someone gives you a little cash for Christmas, think about paying down some debt, Vickerman said.

Give to charity

If you’re planning to do any charitable giving, it’s the right season in more ways than one. If you do it before the end of the year, you can maximize your tax deduction. Some advisers even suggest using a credit card to make a donation now, if you’re running short on cash – though not if you have to carry a balance to do it.

Think about a fresh start

“This is a time to reflect on what have you actually spent in 2008,” Vickerman said. “Review your budget and come up with a budget for 2009. … You want to do that in December. You don’t want to do that in January.”