Time has a tendency to fly by, and this year has been a bit of a blur.
With winter and the new year quickly approaching, now may be a good time to reevaluate various aspects of your life.
The New Year tends to bring about new resolutions and life goals, which is why now is the prime time to figure out what you want to work towards in the coming year.
One area in particular worth assessing is your finances.
While you may be waiting for the holidays to end before managing your money, there are lots of smart financial decisions to make before the end of the year that you’ll want to take advantage of.
Instead of waiting, use this time to place yourself in the best financial position possible as you head into another year.
To prepare, here are seven smart financial moves to make at the end of the year.
1. Reevaluate Your Goals
Take time to figure out where you’re at with your goals, what steps have worked well in accomplishing those goals, and what hasn’t worked. If you’ve successfully achieved any goal you set, take time to think about what you’d like to accomplish in the New Year and create a specific plan on how you can complete your financial aspirations.
2. Add to Retirement
Most people set up an auto-pay for their retirement funds so that the same amount comes out of their paycheck or checking accounts every month.
While this is a fine idea for the majority of the year, it may not allow you to contribute as much as you could to your 401(k) and IRA. If you really want to get a boost in saving for retirement, try to max out your retirement accounts before the year is up.
Either contribute the maximum yearly amount, or as much as you can for your retirement accounts. The more money you place into those accounts, the better, as it gives it time to appreciate.
In the case of IRAs, it also grows tax-free for a much longer period of time. Furthermore, any money put into those accounts is tax deductible to begin with, which means it lowers your taxable income.
3. Assess Your Investments
The end of the year is also a great time to reassess your investment portfolio. Examine how your funds or stocks are doing. If you have some that haven’t been doing well, it may be time to sell, move on, and look for other, more lucrative opportunities.
Moreover, if you’ve experienced any losses from your investments, you can offset up to $3,000 any capital gains you received, which will keep you from getting taxed on your earnings.Make these 7 smart financial moves before the year ends to tie up any loose ends Click To Tweet
4. Check Your Health
If you haven’t seen your doctor in months, now is the time to schedule a visit. If you’ve already met your deductible and something’s been bothering you, there’s no reason to hold off – take advantage of your insurance before it resets.
Furthermore, you usually need to use any money in your Health Savings Account within the year. That being said, unless your employer allows you to carry any extra money over, be sure you don’t let that account go to waste.
5. Evaluate Your Health Insurance and Estate
Another great, end-of-the-year practice is re-examining your health insurance and estate plans. If you’ve had any major life changes within the past year, such as getting married, having children, or getting divorced, then you may need to make adjustments to your health insurance, estate plan, and even life insurance.
Ensure that any family members you want named as beneficiaries are listed, and make sure you’re covered in your policy for everything you might need, or that you aren’t paying extra for coverage you don’t.
6. Make a Donation
Most of us have a collection of items in our homes that we either don’t need or have never used. Take time to declutter your home and give any new or gently used items and clothing to charity.
Depending on the worth of the goods you donate, you can use it as a tax deduction for the coming year. You can also choose to give a monetary donation as well.
Not only can you use this as an opportunity to teach your children or those around you the value of giving back, but it also allows you to receive a tax deduction next year for any donation made by December 31st.
7. Check Your Emergency Fund
One of your most important financial goals should be to keep your emergency fund well-stocked. Even when your fund has reached a comfortable number, it’s still important to maintain it, and if you’ve had to dip into that fund at all, replenish it.
A good rule-of-thumb to have for your emergency fund is to keep at least six months of expenses in it, and usually put those funds in safe investments with low risk. You never know what the new year will bring, which is why it’s always important to have a fall back.
Although December and the end of the year is quickly approaching, there’s still plenty of time for you to make some important financial decisions.
The hardest part is setting aside the time to actually get yourself organized and reassess your finances. If it seems a tad overwhelming to try and accomplish all of these smart financial moves, then don’t. Carefully evaluate your financial situation and consider which moves make the most sense or are most beneficial to you.
You’d be surprised what just a few of these smart financial moves could do for you financially. So, take advantage of any spare time you have and put yourself off to a great start for another new and exciting year.
What are some other smart financial moves you make at the of the year? Which moves have you found beneficial?