Plan For Tomorrow | Financial steps to take before the end of the year
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Financial steps to take before the end of the year

Monday 19 October 2020 | Reading Time: 3 minutes

The end of the year is an important time to make healthy financial choices that will carry you into the next year and beyond. With 2021 fast approaching, here are eight financial moves that will help keep you on track.

Get your financial records in order

Keeping your financial records organized is essential for taxes, but also important to show proof of legal contracts, insurance claims, residency, and tax returns. Saving and filing your financial documents also makes it easy to locate a record you might need. Here are some ways to organize.

Go over your budget

With a new year about to start, it’s time to take a look at your budget and figure out what your spending habits were in 2020 and what debts you owe, as well as to project how much money you’ll bring in for 2021. You should make adjustments to your budget based on any changes to your finances or your life, but also figure out where you might want to cut back and save more. 

Budget for holiday gifts

The end of the year often adds quite a few expenses to your budget due to the holidays. Make sure you keep track of what you're planning to spend on gifts and make a budget so you don’t start 2021 with holiday debt.

Plan for large purchases

If you have some big purchases in mind for 2021, such as buying a new car or taking a vacation, you should start planning for them as soon as you can. If you don’t plan, you risk not having enough money and may be tempted to dip into your emergency savings fund or to charge the expenses to a credit card, which will put you in debt. Figure out how much your goal will cost and when you need the money, so you can start putting funds aside each month into a separate account dedicated to the goal.

Update your beneficiaries

There are many changes in a person’s life, from marriage to divorce to having children, so your beneficiaries should often be reconsidered to ensure the names reflect current wishes and desires. It’s easy to forget to update your beneficiaries, but it’s a mistake not to revisit who stands to receive benefits from your insurance policies, wills, trusts, or estate. If you don’t want your life insurance policy to go to your ex-spouse, for example, review your beneficiaries at least once a year to make any necessary updates.

Evaluate your retirement plan contributions

If you aren’t enrolled in your employer’s 401k program, consider doing that to help grow your retirement fund. If you are already enrolled in a retirement plan through your employer, the end of the year is a good time to consider increasing your contribution. Many employers offer a match based on your contributions. This is essentially free money, so be sure to check and see what your employer policies are on your 401k so you can take advantage of potential opportunities.

Review your insurance coverage

Make sure you have a quality life, health, disability, and homeowner's insurance that can protect your family. Review your policies to determine if the coverage you have is sufficient if you need to make changes or possibly find another provider. 

Talk to a financial professional

Consider working with a financial advisor, who can help ensure your finances are on the right track heading into 2021. To find the right agent who fits your needs, submit your information through our find an agent page.


REV 10/2020