Financial Tasks For End of Year

Alright, alright. I know no one wants to think about the end of the year and what we might need to do to close out the financial year– but it’s important.

There are several financial tasks that you may want to consider completing at the end of the year. Here are some ideas:

Review your budget

Take some time to review your budget from the past year and make any necessary adjustments for the coming year. Look for areas where you can cut back on expenses and find ways to increase your income. This can help you get a better handle on your financial situation and set yourself up for success in the new year.

I also like jotting down exactly how much I spent on housing, transportation, food (groceries and eating out), holidays, travel, investments, and even random shopping. If you diligently track your budget, this should be pretty easy. If you don’t, you might consider a tracking tool like Mint to help out AND get serious about budgeting this year!

Read this post for all my favorite tips/tricks and a free template on budgeting

Check your retirement account contributions

If you have a retirement account, like a 401(k) or IRA, make sure that you are contributing enough to meet your bigger picture retirement goals. You may also want to consider adjusting your investments or reevaluating your risk tolerance. I like to revisit this in December to see if I contributed the full amount into my Roth IRA (as of 2023 you can contribute up to $6,500). If I notice I’m short or didn’t take advantage of that as much, I will create a plan to get get as close to the max contribution by April of the following year. If that’s confusing definitely recommend chatting with a tax pro or scanning through Vanguard’s website to learn about Roth IRAs.

I also like to do a quick glance to see how my investments are looking and do any reallocations if needed-but honestly, if you follow the advice from the book recommendation below, this is likely not needed.

Read this book for all the details on investing and tax advantaged accounts (this is my #1 recommendation for books on investing)

Consider tax-saving strategies

If you expect to owe taxes for the year, there are several strategies you can use to reduce your tax bill. These might include contributing to a traditional IRA, claiming tax credits or deductions, or maxing out your 401(k) contributions. You can consult with a financial advisor or tax professional for more specific advice.

I am certainly no tax pro, although I did have a 2 year stint in public accounting.I believe everyone should seek advice from a CPA at some point in your life to see if you are missing out on any tax savings. (Hint- you probably are.)

Make charitable donations

If you are planning to make charitable donations, it’s a good idea to do so before the end of the year. This can help you claim a tax deduction for your charitable giving.

Again, if you consult with a tax pro, they can help you understand how you can use some of your charitable contributions/donations to reduce your taxable income. General rule of thumb, get receipts for any donations you do. Yes, it’s a pain. But it can save you hundreds on your taxes.

Review your insurance coverage

Take some time to review your insurance coverage to make sure you have the protection you need. This might include reviewing your health insurance, life insurance, car insurance, and homeowners or renters insurance. If you find that you are underinsured or paying too much for coverage, consider shopping around for better rates or coverage.

Super important to not skip this step. So many people are overpaying for insurance. On the flip side, with housing appreciating like it did, you might be underinsured. This was the case for me and was something we adjusted a couple years ago.

Review your estate plan

If you have an estate plan in place, it’s a good idea to review it at the end of the year to make sure it is still up to date and meets your needs. This might include reviewing your will, power of attorney, and any other estate planning documents you have in place. If you don’t have an estate plan, now is a good time to consider creating one.

Listen to this podcast episode about estate planning

These are all great tasks to do towards the end of the year! I know some of them might be a little too late (ie. retirement contributions or charitable contributions) but it’s a good list to keep handy for next year.

Hope this helps!

-Whitney