The Best Money Moves for October 2021

From financial aid for college students to health insurance for retirees, October brings the start of some important annual sign-up periods as well as some important deadlines, like the end of the 2020 tax-filing season.

While you're getting a head start on those tasks, you should also think about setting aside money now to help you afford the bevy of expenses that come toward the end of the year, including holiday gift-giving and travel, says Garrett Philbin, a financial coach and founder of Be Awesome Not Broke.

"Structure and consistency can help ease stress and anxiety around money," he says. "It’s helpful to break things down into manageable chunks."

Here's your list of manageable chunks for the month of October:

1. Get ready for the FAFSA if you (or your child) will attend college in 2022

The Free Application for Federal Student Aid opens on Oct. 1. Every student who is planning to attend college in 2022 should fill out the application, which opens the door to federal student loans, grants and work-study. States also use the FAFSA to award aid for college, and many colleges use the information on the FAFSA to determine eligibility for their institutional awards.

You can file the FAFSA for the 2022-2023 academic year any time between Oct. 1, 2021 and June 30, 2023. But you'll have the best shot at getting all the aid you're eligible for if you file in October or November. Several states award money on a first-come, first-served basis until the funds run out. And colleges, too, have limited financial aid budgets. Waiting until the spring or summer before the 2022 academic year can put you at the back of the financial aid line.

2. File your 2020 taxes (if you haven't already) by Oct. 15

The jig is up, the news is out, we've finally found the last tax deadline for 2020. If you asked the IRS for an extension back in May, you have to file your taxes in the next two weeks to avoid facing a penalty for filing late. (There are exceptions for active military members or people living in areas declared a federal disaster zone.)

Note that asking for an extension on filing does not mean the same thing as getting an extension on paying your taxes. So if you didn't send in an estimated tax payment in the spring, your bill now may be inflated with late fees.

There usually isn't a penalty for filing late if the taxpayer is due a refund, but people who wait too long to file and claim a refund risk losing it altogether, the IRS says. Here's more info from the IRS on the Oct. 15. deadline.

3. Observe World Mental Health Day by spreading the word about affordable therapy options

The number of Americans reporting depression and anxiety has ballooned during the pandemic. Like other types of medical care, sorting through insurance jargon or counseling you can afford without health insurance can be overwhelming, particularly for those who have to do it while managing conditions like depression or anxiety. So, in honor of World Mental Health Day on Oct. 10, make sure you (and your loved ones) know about the increasing options for affordable, accessible therapy.

Most insurance plans will cover some form of mental health treatment, thanks to the Affordable Care Act, and Medicaid and Medicare, in most cases, will offer mental health coverage. If you don't have health insurance or you find the copays on your plan still unaffordable, some mental health care providers offer sliding scale fees aimed at opening up therapy to lower-income Americans. The website for the Open Path Psychotherapy Collective, for example, has a network of therapists that offer a fee on the sliding scale of $30 to $60 for individual counseling.

If you're having trouble finding a therapist who has openings — especially one who takes your insurance — explore the growing number of free or low-cost apps. The Anxiety & Depression Association of America has reviews of more than 25 apps, ranging from mediation guide Headspace to the Department of Veterans Affairs-supported app, PTSDCoach. Read more about how to find affordable therapy here.

4. Prepare for Medicare Open Enrollment

Open enrollment runs from Oct. 15 through Dec. 7. During this time, Medicare beneficiaries can pick a new Medicare Part D drug plan, a new Medicare Advantage plan, or switch from original Medicare into a Medicare Advantage plan or vice versa. Any coverage changes made during this period will go into effect Jan. 1, 2022. (Medigap plans, also known as Medicare supplement plans, are not part of open enrollment.)

While you're not required to act, it's smart to see if your current coverage still meets your needs. Maybe you've gotten a new diagnosis during the year and require a new medication. It's possible that another Part D drug plan would cover it more comprehensively than your current one. Or maybe your health needs have remained the same, but your plan will change how it covers your existing medications. Plans describe any changes they're making to your coverage in the annual “notice of change” that they mail participants at this time of year. You can search for all the plans available in your area at Medicare’s official Plan Finder tool.

5. Decide how to deal with your mortgage forbearance before it expires

Some homeowners with federally backed mortgages will soon come to the end of their 18-month forbearance period, and they'll need to make a plan to pay back all the monthly bills they skipped. If you're one of them, the best place to start is by contacting your mortgage servicer to talk through your options. Don't wait to the last minute to sort out a plan; with thousands of homeowners exiting forbearance every single day, Black Knight, a mortgage data analytics firm, said this fall would present a "staggering" operational challenge for servicers.

More than 9 million households have used a COVID-19 related forbearance at some point since the beginning of the pandemic, according to a New York Federal Reserve Bank report. While most of those homeowners have since exited forbearance, about 1.6 million remain in active plans, Black Knight estimates.

The firm says forbearance exits could rise sharply at the start of October and that as many as 330,000 homeowners will have their forbearance expire before the end of this month. (An earlier report from the firm estimated that a combined 1.2 million homeowners would see their forbearance plan expire between September and December 2021.)

Homeowners exiting forbearance should know that you can pay back all of your missed payments in a lump sum, but servicers are not allowed to force you to do so. You also have the option to repay the missed amount over several months on top of your regular mortgage payment, pay off the missed amount at the end of your loan or ask for a loan modification. The Consumer Financial Protection Bureau has more guidance available here.

6. Start saving money for holiday shopping

You still have nearly two full months before the first sales of the holiday season drop. That may sound like a lot of time, but when it comes to finding extra money to set aside for higher end-of-the-year spending, any additional time you can get will be helpful. Try to put your holiday spending money into a separate bucket, whether that means opening up a new (free) savings account, or splitting up money in your existing bank accounts, Philbin says. (Several banks have introduced some version of savings buckets, where you can allocate certain amounts for separate goals.)

"It's really hard for us, as humans, to keep track of how much money is for different goals if it's in one pot," he says.

Another reason to start thinking about holiday shopping early? As we warned last month, supply-chain issues are likely to bring shortages, shipping delays and all-around headaches for shoppers this winter.

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