Everyone knows Santa’s making a listing and checking it twice. But what form of list, you ask?
An end-of-year money to-do list, in fact.
Christmas and Hanukkah are fast approaching, and there is lower than a month until the ball drops, which suggests it’s prime time to conduct a financial checkup before the brand new yr arrives. Loads of these tasks involve pre-planning to avoid playing catch-up or worrying about something you must have already done, in line with Alanna Morey, a personal wealth advisor with Ameriprise Financial. Your goal to shoot for, she says: “No surprises in 2025.”
Putting in the hassle now to get your financial house so as shall be value it later. With that in mind, here’s an end-of-year financial to-do list for 2024.
Revisit your budget
Jaime Eckels, a partner at Plante Moran Financial Advisors, says December is an incredible opportunity to look back on the previous yr and determine whether you stayed on course.
You need to scrutinize your bank card statements and ask yourself: How did your plans work out? Were you in a position to follow your budget? Did you spend way greater than you intended on, say, espresso martinis and the Eras Tour on the expense of your short-term savings for a latest iPhone?
“We at all times speak about budgeting and the way vital it’s [but] it only works for those who can actually check back and reflect and see how you probably did in comparison with what your goals were,” Eckels says.
You’ll be able to then take what you learned and apply it to your spending plan for 2025. For example, for those who weren’t in a position to persist with the really helpful 50-30-20 breakdown in 2024, possibly that you must adjust those thresholds. If surging home and auto insurance premiums are dragging you down, possibly that you must shop around for higher rates.
Save for retirement
Morey says to ascertain in in your retirement savings plan next. If you have got an individual retirement account, or IRA, there’s still time to max it out for 2024: The deadline for IRA contributions is April 15, 2025. You’ll be able to put away as much as $7,000 ($8,000 for folk age 50 or older) in your traditional and Roth IRAs, though Morey points out that there are IRS income limits to think about.
You’ll be able to stash as much as $23,000 in your 401(k) for 2024 (people 50 and up can throw in an additional $7,500). These contributions generally need to be organized through work, but there’s still time to contact your organization’s payroll department and ask to sneak in a bit more out of your remaining paycheck(s). 401(k) contributions need to be made by Dec. 31.
Meet end-of-year deadlines
Recent 12 months’s Eve is not just for downing copious amounts of champagne and eventually determining how on this planet they are going to make “2025” into glasses. It is also the deadline for older Americans to make required minimum distributions, or RMDs, from their retirement accounts. (The rules on this recently modified due to the SECURE 2.0 Act, so pay close attention.)
Dec. 31 is usually the last day to spend funds in your Flexible Spending Account, or FSA, too. (Some FSA plans have different deadlines.) This money is use-it-or-lose-it. Luckily, there are a ton of how to make use of it: FSA-eligible items include sunscreen, vitamins, tampons, contacts, acupuncture, travel pillows and more.
Review your portfolio
Morey suggests speaking together with your financial advisor about whether your investment portfolio still aligns together with your goals. One easy place to start out is by asking yourself whether you are still comfortable together with your asset allocation, which refers to how investments are divided amongst stocks, bonds and money based in your risk tolerance, time horizon and goals.
Typically, investors can afford to tackle more risk once they’re younger. The older you get, the less money you will likely wish to have in stocks.
Eckels says this time of yr can also be a very good time to look at your brokerage accounts and see if there are any opportunities to reap losses.
Update your estate plan
Death will not be super-fun to take into consideration when decking the halls and blasting *NSYNC’s Home for Christmas, but there is not any time like the current to determine what Eckels calls your crisis plan. Although you may create a basic will on your individual through a service like LegalZoom, it’s probably smarter to succeed in out to an estate attorney. They will assist you to put together an airtight package of end-of-life documents, including medical and financial powers of attorney.
Folks who’re already ahead of the curve and have an existing estate plan aren’t off the hook. They need to sit down and revisit all the things, Eckels says.
“Are the provisions appropriate? Are the individuals you named 10 years ago still the individuals you would like to make your financial and health care decisions?” she says. “Because life changes, families change, and sometimes we just set it and forget it.”
Give yourself a high-five
Morey urges you to not forget the crucial step of self-congratulation. No, really: She says that amid the hustle and bustle of the vacations and dealing through this list of economic tasks, you must take a moment and hype yourself up for all the cash goals you reached in 2024.
That may very well be getting a raise at work, buying a house, taking a visit you have been saving for or paying for a flight with bank card points — whatever matters to you and can motivate you going forward.
“Pat yourself on the back for the great work,” she says. “Congratulate yourself for the exertions you have been putting in, after which make a plan for what you would like to do in the approaching yr.”
More from Money:
The FSA Deadline Is Coming. Here Are 12 Last-Minute Ways to Spend Your Dollars