As the year draws to a close, it’s a great time to take stock of your financial health. After all, a strategic approach is the best way to set yourself up for success in the coming year. Not sure where to start? We’ve assembled a year-end financial checklist to help you feel confident about your financial future.
1. Review Your Budget.
Take a close look at your spending patterns throughout the year. Identify areas where you can cut costs or reallocate funds for better use. Think about the year ahead and adjust your budget to meet your financial goals.
2. Take Action on Savings.
Are you saving to buy a house? Hoping to fund a summer vacation? Set yourself up for success in 2025 by opening a dedicated savings or money market account for your financial goal. Objective-dedicated accounts can help you stay organized and keep you focused on reaching your financial milestones. Once your account is in place, get creative with your budgeting. Seek out a method of saving that will be both satisfying and sustainable.
3. Assess Your Emergency Fund.
Do you have an emergency fund? Evaluate it and confirm that you have enough to cover three to six months’ of living expenses. If not, make additional contributions to bolster the fund. Ensure the funds are easily accessible in a liquid account (like a Premium or Indexed Money Market Account).
4. Maximize Retirement Contributions.
If you want to lower your tax burden for 2024, now is a great time to make additional contributions to your IRA or 401(k). You have until Tax Day 2025 (April 15) to contribute to your IRA for the 2024 tax year (up to $6,500 for individuals or $7,500 if you’re 50 or older). The deadline for 401(k) contributions is December 31, 2024, with limits of $22,500 for individuals and $30,000 for those 50+. Then, starting January 1, 2025, contributions for the 2025 tax year will be subject to new limits announced by the IRS. In the meantime, if you aren’t already doing so, take advantage of any employer-matching contributions to maximize your retirement savings.
5. Contribute to your Health Savings Account (HSA).
Another way to reduce the amount of federal tax you owe is by making additional contributions to your HSA before the year ends. Unlike FSAs (see below), the funds contributed to an HSA remain in your account from year to year. HSA contributions, investment earnings, and distributions are not subject to federal taxation (but may or may not be subject to state taxation) and any unused funds can be used to pay for future qualified medical expenses.
6. Check your Flexible Spending Account (FSA).
Most FSAs have a “use it or lose it” policy that expires at the end of the calendar year. If your employer does not allow FSA balances to roll over into the next year, make sure you aren’t leaving money on the table. If you have money left in your account, schedule doctor’s appointments as quickly as possible or submit outstanding medical bills for reimbursement before time runs out.
7. Do a Health Insurance Checkup.
Before the new year (and New Year’s resolutions), review your insurance coverage and decide if your health plan meets your current and upcoming needs. Update your information and ensure that your insurance plans align with any changes to your health, marital status, or living situation. Open enrollment through Healthcare.gov runs through December 15, so you still have time to compare plans and evaluate your options. Also, if you use a traditional savings account to set aside funds for possible medical expenses (like dental work, surgery, or emergencies), consider starting an FSA or HSA for medical expenses in 2025.
8. Tackle Debt.
Do you have a lot of debt? Take stock of your outstanding debts and prioritize repayment. If you can, consolidate or refinance high-interest debts for better terms. Review your official credit report and develop a plan to systematically pay down debts in 2025, starting with high-interest obligations.
9. Evaluate Your Investment Portfolio.
Before 2025, take a moment to review the performance of your investment portfolio and (potentially) diversify your investments to manage risk effectively. If necessary, rebalance your portfolio to align with your long-term financial objectives.
10. Reassess Your Insurance Coverage.
If it has been a while since you changed your home, life, or auto insurance, we’ve got bad news. You may not be getting the best deal. In fact, some sketchy insurance carriers thrive on customer complacency. To avoid overpaying (or driving underinsured), shop around. Experts recommend re-evaluating your auto insurance options every six to 12 months (and home insurance annually). This is especially true if you move, get married, or have other big life moments. You don’t have to leave your current carrier. You don’t even have to wait until your current policy runs out. Just ask your current carrier or one of the Maps insurance agents to reassess your rates. Also, if you aren’t already doing so, consider bundling your policies for potential cost savings. (And while you are at it, be sure to update beneficiaries and their contact information.)
11. Solidify Your Estate Planning.
Once a year, it’s wise to ensure your will, trust, and other estate planning documents are up-to-date. If you don’t already have a will, trust, or estate plan, start the process of creating one. If necessary, consult with an estate planning attorney for comprehensive guidance. Once your legal paperwork is complete, take a moment to review and update the beneficiary designations on your bank accounts.
12. Evaluate Education Savings.
Do you or your children have upcoming education expenses (such as tuition and books)? A state-based 529 college savings plan can help you save with tax advantages. In Oregon, you can contribute to the Oregon College Savings Plan until the account balance reaches $310,000 per beneficiary (lifetime limit). Oregon residents can also deduct contributions on their state income taxes—up to $2,620 for single filers and $5,240 for joint filers in 2024. Plus, earnings grow tax-free, and qualified withdrawals are tax-free at both the state and federal levels. Check with your tax advisor to confirm the latest deduction limits and to see how a 529 plan fits your education savings goals.
13. Make Charitable Donations.
If you want to claim a charitable donation on your 2024 tax return, be sure to make your donations before December 31, 2024. In general, you can deduct up to 60% of your adjusted gross income through charitable donations (with some limitations). So, keep track of your tax-deductible donations, no matter the amount.
This year-end financial checklist is a proactive step toward securing your financial future. By addressing these key areas, you can enhance your financial well-being, minimize risks, and position yourself for success in the coming year. If you need help budgeting, investing, or protecting yourself and your assets, let us know. We are happy to provide personalized insights and guidance to help you meet your financial (and personal) goals. After all, if you prioritize your financial health now, that effort will pay dividends in the years to come.
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