Financial steps to take before the end of the year

As another year comes to a close, this can be a perfect opportunity to take a closer look at your finances, review your budget and spending, and set your financial goals for the New Year. The steps you take today can help you start January off on the right foot and make healthier financial choices in the days ahead. To help you prepare for upcoming costs and be better positioned for financial success next year, here are eight end-of-year financial planning tips.

Prepare for holiday spending

The end of the year can be an expensive time for many people as the holiday season arrives. If you didn’t factor holiday spending into your budget this year, consider doing so as you plan for the months ahead. When you have gifts, travel, and other related costs included in your overall budget, you’ll be less likely to overspend or begin the New Year trying to pay off holiday debt.

Evaluate your finances

Before the New Year begins, take a look at your budget and review this past year’s spending habits, current debts, and the previous financial goals that you set at this time last year. If you missed the mark on any of them, take the opportunity to see which ones can be updated or eliminated according to your current financial situation. Will any of these goals roll over to next year? Are there any areas where you could cut back your spending? Could adjusting your budget provide a way to help make your goals achievable and put a little more money toward savings? Taking your financial pulse at the end of the year can help you fine-tune your budget and get you better prepped for upcoming purchases.

Match your goals and budget

When you think about the New Year, what financial goals come to mind? Would you like to take a trip, purchase a new car, start an emergency fund, or begin saving for retirement or your child’s college education? Whatever goals you have in mind, it’s best to start planning for them as soon as you can. By revisiting your budget regularly, you can ensure you have money to allocate towards these goals and avoid racking up your credit card balance or tapping into your emergency savings fund. Assign a date to each goal and how much you will need, so you can start putting funds aside each month.

Get your financial records in order

To help get your financial life in order, make sure your documents and records are organized. Not only are they essential for taxes, but you may need them to show proof of legal contracts, insurance claims, and residency. You can follow these organizational tips to help create a filing system, store receipts, and secure your electronic financial documents.

Review your retirement plan contributions

If you’re enrolled in a retirement plan through your employer, take this opportunity to review your contribution amount and whether you want to increase it for next year. Many employers offer a match based on your contributions, so this can be a helpful way to put more money toward your retirement fund. Take a look at your employer’s policies on 401(k)s and how you can maximize the opportunities available to you.

Update your beneficiaries

As you dive into your financial review, take time to look over your estate plan, will, trusts, and insurance policies and who you have designated as your beneficiaries. If you’ve experienced any life changes, like marriage, divorce, or the birth of a child, you’ll want to make sure the names you have listed reflect your most current wishes.

Meet with a financial professional

To make sure you’re on the right track heading into a new year, meeting with a financial professional can give you useful guidance and perspective. He or she can provide a comprehensive view of your finances, answer any questions, and discuss your goals in more depth. There may be savings opportunities you’re missing or creative ways to reach your financial objectives. By taking time to assess your financial situation at year’s end, you can set a solid foundation for the coming months and successfully check off your resolutions by this time next year.

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REV 11/2022