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Welcome to this week’s edition of our Tuesday Top 5, Econ4U’s weekly tips post to help you manage your money in five easy steps.

You’re probably not thinking about tax season right now, but fall is a great time to revisit your tax planning strategies. Here are a few tips to make the most of your money before December 31 creeps up on you.

1. Stock up on health supplies. If you participate in a company-sponsored flexible spending account (FSA) for tax-free health expenses, start thinking about ways to avoid leaving money on the table. Stumped about what to get with your dough? Glasses or contacts, cold medicine, first-aid kits, ice packs for treating injuries, and heart-rate monitors all qualify. Drugstore.com even stocks a FSA store full of qualifying goodies. But do it fast: Starting in 2011, you won’t be able to run up a drugstore bill with your FSA dollars. The new health-care law prohibits spending FSA money on anything you don’t have a prescription for (with insulin as the exception).
2. Make your home more energy efficient. Holiday weekends (like the one three days from now) are a great time to buy new appliances at a steep discount. And through the end of the year, you can qualify for a 30 percent credit (up to $1,500) on approved doors, windows, and roofs as well as high-efficiency furnaces, water heaters, stoves, and heating and air conditioning units installed in your primary residence.
3. Save tax dollars when you refinance your home. If you’ve taken advantage of low mortgage rates this year to refinance your home, don’t forget that you can deduct all unamortized points on an old refinancing as well as points on the new loan.
4. Identify charities you want to support. Charitable donations are deductible through December 31 for the current tax year, but pouring money into worthy coffers can be a low priority at year end when you’re busy playing Santa. Make your annual donations now before your wallet starts feeling pinched by the holidays.
5. Begin to max out your retirement savings. If you qualify for an IRA or Roth IRA and haven’t begun making contributions for 2010 yet, start by socking away a little right now. The contribution limit is $5,000 if you’re under age 50, and you have until April 15, 2011 to get it all in there. So put away $625 a month for the next eight months to max the fund out — it will hurt a lot less than trying to come up with $5,000 on Tax Day.

Making retirement saving a priority is the recognition that it’s easier to go without now (when you’re young and able-bodied) than at the end of your life when your options are fewer. Unfortunately, recent surveys suggest that 57 percent of Americans feel they are behind on their retirement savings. But it’s never too late to turn that ship around.

1. Learn to delay gratification. Almost any budget has room to trim expenses. Are you paying for a convenient but unnecessary data plan on your smartphone? Getting your money’s worth from your gym membership? Spending a lot on books and music downloads instead of borrowing from the library? All of that adds up to a lot of money spent in the long run — you have to decide whether it’s all worth it.
2. Start small but start early. The younger you are when you open your first retirement account, the better off you’ll be. If you start your retirement fund when you’re 25, your contributions have a full 40 years to grow. If you put $100 into your account every week, with a modest 6 percent return in the stock market you’ll end up with about $867,000 at retirement. Not bad, considering you’ll only have deposited $208,000 of your earnings.
3. Don’t count on a pension. Just because you’re a member of a public employee union doesn’t mean you don’t have to save for retirement. Data published by Barron’s show that eight states have enough money to cover only two-thirds of their pension liabilities, and thirteen more are only 80 percent funded. That means millions of Americans will not receive what their unions have promised them. Even non-unionized companies have bankrupted their pension plans in the unstable economy. Take responsibility for your own future and open an IRA right away.
4. Increase saving by 1 percent. It isn’t such a big increase that your monthly budget will be significantly affected, but over time the magic of compound interest will make your savings grow noticeably faster.
5. Play catch up. Even if you’re no spring chicken, you still have time to grow a decent nest egg. Experts suggest a baseline savings rate of 6 percent of your gross salary — and build from there as soon as you are able. And once you’re over age 50, the IRS raises your 401(k) and IRA contribution limits, so you can save even more tax-free.

If you’re a parent yourself, there are a lot of ways you can put your kids on the path to financial success while they’re still young. Here’s a sampling of ideas:

• Put their allowance on plastic. Teaching them early about how debit and credit cards work will serve them well as adults when it’s their own money they’re spending. Obopay has a product perfect for this.
• Prioritize retirement over college. You can take out a loan for college, but you can’t take out one for retirement. Even if you want to give your child the world by paying for his or her education, make sure you max out your retirement plan before you start making contributions to Junior’s college fund. By getting an early start on retirement saving, you can free up more money down the road for education expenses.
• Live by example. This is the most important one: A University of Arizona study last year found that kids learn their spending habits from mom and dad — not from books or school. Use that influence wisely.

Last week, Anne posted some shocking survey results regarding the state of American workers’ retirement accounts. But even if you’ve been diligently saving for decades, you could still benefit from a few pointers on how to make that money survive as long as you do.

Here are some tips to keep the tarnish off your golden age:

1. Revisit your asset allocation. As you approach retirement, you’ll want to adjust your investment strategy to make it more conservative — but you don’t want to put everything under the mattress. The retirement experts at T. Rowe Price recommend keeping at least 20 percent of your investments in stocks after retirement to keep your return going strong.
2. Delay retirement by a year or two. When your savings balances are at an all-time high, that’s when you reap the most benefit from compounding interest. Staying in the workforce a year or two longer allows you to collect big on investment returns (presuming the stock market is cooperating).
3. Minimize your withdrawal rate. Again, this is a strategy to allow compounding interest to work its magic for longer. Tap your non-retirement assets early — for example, downsizing your house and drawing on your profits from the sale. If you do dip into your retirement accounts immediately, keep your withdrawal rate to under 4 percent and your savings are almost guaranteed to outlive you (that’s a good thing!).
4. Play catch-up late in the game. The IRS allows you to increase your IRA contributions to $6,000 per year once you’re over the age-50 threshold. Take advantage of the opportunity if possible.
5. Seek out new retirement vehicles. Do you have freelance, self-employment, or hobby income? If so, you can open a SEP-IRA and contribute up to 25 percent of your income tax free. (Check here to see if you’re eligible.)

While $1,000 may seem like a genuine chunk of change, in reality it’s not hard to save up that much with a little discipline. You’d save that much by giving up your daily $4 latte for eight months, or by forgoing your $100-a-month premium cable package for less than a year. But the real question is, what’s the best use for that money?

If your first thought is “shopping spree” or “ski vacation,” we offer the following alternatives:

1. Pad your emergency fund or retirement account. The first tip is also the most obvious — if you don’t have a savings account with at least six months of expenses (enough to cover stuff you wouldn’t want want to go without, like your mortgage or rent, utilities, health insurance premiums, and groceries), you probably know you should. Otherwise in the case of job loss, you’ll have to dip into your 401(k), which you know enough not to do. But having even $1,000 in the bank will go a long way toward paying those unanticipated bills, like emergency vet care or car trouble.
2. Open a high-yield savings account. Let’s go back to that idea of a ski vacation for a minute. By opening a money market account with an online bank, you’ll likely find better interest rates than if you were to sock that money away in a brick-and-mortar bank due to decreased overhead. That means you’ll reach your short-term goals faster, like taking that trip or buying a new car. You can find the best rates by browsing banks at Bankrate.com.
3. Pay down your credit cards. OK, we admit that this is the most boring option. But since you’re unlikely to find a no-risk savings account that offers a higher interest rate than what you’re paying on your balances, putting it toward any consumer debt is like an instant return on your money.
4. Invest in an index fund. If you’ve got the emergency fund and the consumer debt under control, then maybe now is the time to get into investing. Take a baby step toward making real money in the stock market by putting that money in a low-cost index fund. It tracks the overall state of the stock market, which makes it an ideal long-term investment.
5. Treat yourself. Do you have check marks next to all of the above? Congratulations — you’ve put yourself in great financial shape. Make sure you remember what you’re saving all this money for anyway and indulge a little.

And in the spirit of the holiday, take a minute this week to give thanks for your good fortune.

Today we tell you the five things you need to know if your end goal is retiring a millionaire. Sound like a pipe dream? It’s not if you start early enough.

1. Think you don’t earn enough money to become the next Scrooge McDuck? Think again. Even if you’re only making $30,000 in your first job out of college, you can still do it with enough discipline. CNNMoney’s calculator says that if you stash $3,300 — 11 percent of your income — in a tax-deferred account like a 401(k) every year, you’ll hit your first million in just under 42 years (assuming the stock market’s average 8 percent annual return continues). While 42 years may sound like an eternity, isn’t being a millionaire worth it?
2. Commit to savings today! Spend less than you earn and put the difference in a savings account. There’s a reason Einstein called compound interest “the most powerful force in the universe.” If you’re in your early 20s, this is the time to start.
3. Research your options. There are several types of savings accounts that differ by degrees of risk and reward. A standard savings account allows regularly scheduled deposits and permits withdrawals at any time. Interest rates are relatively low but there is no risk of losing your savings.  A certificate of deposit (CD) may offer a higher rate of interest than a savings account; however, putting your money in a CD makes it inaccessible for the length of the deposit unless you pay a penalty and lose any interest earned. Like checking and savings accounts, CDs are usually FDIC-insured, meaning that you are covered if the bank fails.
4. You don’t just need money in the far-off future. A good savings strategy covers short-term needs as well: things like emergency expenses, buying a car, and making other big purchases. Keeping about $1,000 liquid is a good idea so you can have instant access to it in case of an emergency — this will help you avoid putting it on plastic.
5. Once you have achieved your targeted principal amount, it’s time to explore investing. Deposits placed in other types of investment vehicles will promise a higher rate of return but they do involve more risk than a savings account. Keep in mind there’s no such thing as a 6 percent return on your investment with no risk, and you should run from anyone who promises you this or any other low-risk, high-reward scheme. Determine your risk tolerance and find an investment that suits your needs, be it stocks, bonds, mutual funds, or other ways of growing your money.

The biggest lesson here: Compound interest is your friend. Nurture that friendship and it will serve you well for life.

Sad as Money’s demise is, there’s a wealth of free online tools to track everything from your credit score to your net worth. Here are a few of the better options:

• Mint.com is the grandaddy of online budgeters. Functioning like a web-based version of Money or Quicken, it can track every retirement, credit, and savings account with your name on it. While wary consumers are wise to think before they Mint, the website has taken many steps to safeguard your financial information, and was recently purchased by Intuit, the maker of Quicken.
• Similar to Mint, Thrive is an online money-management program with a neat feature that shows you how long you’ll have to save up to get that new smart phone or down payment.
• Curious what your all-important credit score is but hate paying the fee to check it? CreditKarma.com will give you a free score like magic.
• ESPlanner.com offers a free basic version of its retirement-planning software online. It doesn’t have all the bells and whistles of the original, but it doesn’t cost $149 either.
• The Financial Planning Toolkit offers free advice to help you navigate the tricky world of making an estate plan or will — a critical document if you have people who depend on you.

Of course, if you don’t mind paying for a more full-featured solution, Quicken 2010 is always an option. It will import your existing Money files and has more features than most web-based products, particularly for rental property and small business owners.

In honor of the upcoming awareness campaign, here’s a roundup of posts Econ4U has previously published on the subject of retirement savings:

• Forbes.com recently wrote about the costly financial mistakes that young people most often make, typically through sheer laziness. No. 2 on the list? “Not Opening A Retirement Fund (As Soon As Possible).”
• A report by USA Today found that the U.S. government cannot make good on its obligations to future retirees without raising taxes or reneging on promises. Meaning: If you’re relying on Social Security or a government-backed pension, you need a Plan B.
• Investors shaken by last year’s stocks free fall stand to earn much smaller returns on their money (and consequently, a lower standard of living in retirement) if they invest too conservatively now that the market is showing signs of recovery, says The New York Times.
• Confused by the relative benefits of stocks versus bonds? Online financial resource Morningstar.com’s Investing Classroom will teach you the basics (for free!).
• Wells Fargo operates a “retirement boot camp” for people who are close to retiring but aren’t sure what giving up their day jobs will mean for their standard of living. Many participants end up delaying retirement to give themselves a chance to save more.

Like a college curriculum, you can advance from Stocks 101: Stocks Versus Other Investments up through Portfolio 502: Efficient Market Theory. Each section concludes with a quiz that earns you credits. With your credits you can buy free stuff, like a premium membership to their investing tips — which will come in handy once you know your stuff. So even if you’re not an investing novice, everyone can take something away from the program.

The stock market can seem daunting but it doesn’t have to be. Whether you’re investing megabucks for fun or squirreling away a few dollars a week for retirement, free online resources like these are great for allowing you to catch up to — and even surpass — your peers on a financial level.

PaycheckCity.com’s Net Pay Calculator takes the guesswork out. It’s a particularly useful tool if, for example, your job is in Washington, D.C., but you’re also apartment hunting in nearby Virginia and Maryland.

Assuming you’re a single tax filer making $50,000 with paychecks twice a month, this would be the difference for each paycheck based on the tax rates where you live:

• Maryland: $1,488.33
• Virginia: $1,481.46
• Washington, D.C.:  $1,463.33

In other words, by choosing to live in Maryland over D.C., you’d have $600 more in your pocket by the end of the year.

The calculator is also handy for seeing how much tax-deferred retirement contributions affect your take-home pay. If our Maryland-dwelling worker began investing $200 per pay period into a 401(k) account, his paycheck would only decrease by $125.60 because of the tax benefits. (So $125 in exchange for thousands of dollars in security decades down the road? Now that’s a good deal.)