As the year winds down, now is a perfect time to take stock of your financial health and make strategic decisions that can set you up for success in the coming year.
Whether it’s optimizing your tax situation, reassessing your budget, or planning for future goals, there are plenty of things you can do before December 31 to set yourself up for success in the upcoming year.
Here’s a comprehensive end-of-year financial checklist to address before December 31st.
1) Tax Preparation: Start Now to Save Later
The sooner you tackle your tax prep, the more opportunities you'll have to reduce what you owe and keep more of what you've earned. These tasks are time-sensitive, so crossing them off your list now means you'll start the new year ahead of the game instead of scrambling in April.
Max Out Retirement Contributions
Contributing to retirement accounts like 401(k)s or IRAs not only bolsters your savings but can also lower your taxable income.
For 2025, the contribution limits are $23,500 for 401(k) plans (plus $7,500 in catch-up contributions for those 50 and older) and $7,000 for IRAs (including Roth IRAs) with an extra $1,000 for those over 50. These limits are indexed annually for inflation. 401(k) contributions are due by Dec 31; IRA and HSA contributions by Tax Day (typically April 15). Ensure you’ve contributed as much as possible to take full advantage of these tax benefits.
If you're 73 or older, take your Required Minimum Distribution (RMD) by Dec 31 of each calendar year to avoid a 25% penalty. The RMD age gradually rises to 75 by 2033.
Your essential guide to planning for retirement!
Organize Tax Documents
Avoid the last-minute tax scramble by gathering essential documents, like any 1099s that were completed throughout the year, and receipts for deductible expenses. (Your W-2s should be ready as early as January, so keep an eye out for those.) Download digital copies early and create organized folders, whether physical or digital, so everything's easy to find when you need it. This will make filing your taxes in the new year smoother and help you identify any additional tax-saving opportunities. If you work with a tax professional, send them your docs early to avoid the April rush.
Make Charitable Donations
If you itemize your deductions, charitable contributions made before the end of the year can reduce your taxable income. Consider donating cash, goods, or even appreciated securities to qualified organizations to maximize your impact and tax benefits. Donating appreciated stocks or mutual funds avoids capital gains taxes while giving you a full deduction for the current value. Just be sure to verify the organization's IRS-qualified status first.
2) Budget and Savings: Reflect and Reset
You've managed your money for another year, and that deserves recognition. This end-of-year checklist helps you celebrate what went well and identify where you can build on that momentum. Small adjustments to your budget and savings can strengthen your confidence and security ahead.
Review Your Budget
Take time to analyze your spending habits over the past year. Were there areas where you consistently overspent? Areas where you want to invest more financially? When you're reviewing where your money went, pay attention to recurring subscriptions and auto-draft expenses. Budgeting apps can help you spot patterns you might otherwise miss. Use these insights to fine-tune your budget for the new year.
Create a realistic value-based spending plan!
Spend Flexible Spending Account (FSA) Funds
Many FSA plans have a “use it or lose it” policy, meaning unused funds are forfeited at year-end. Review your FSA balance and spend remaining funds on dental, vision, or medical expenses. Some employers offer flexibility like a grace period through March 15 or a carryover of up to $640 (indexed through 2028). Check with HR about your plan to find out if you have any flexibility.
It’s worth noting that Health Savings Account (HSA) contributions can be made until Tax Day. For 2025, limits are $4,300 individual/$8,550 family (indexed through 2028), plus $1,000 catch-up if 55+.
Boost Your Emergency Fund
An emergency fund is your financial safety net. If yours isn’t where it should be—ideally, 3–6 months’ worth of expenses—allocate any year-end bonuses or extra cash to pad your high-yield savings account (HYSA). If you don’t have one already, check out our list of recommended banks for your HYSA.
Have a year-end bonus coming? Or expecting a tax refund? Funneling even part of that windfall straight into your emergency fund can give you meaningful momentum without disrupting your regular budget.
3. Debt and Credit: Strengthen Your Financial Standing
Ending the year with less debt and an accurate credit report puts you in a stronger position for whatever comes next. A solid year end financial planning checklist includes a quick check now to open doors to better rates and opportunities in the new year.
Pay Down High-Interest Debt
Credit card debt can be a significant financial drain due to high interest rates. Use any extra funds to make larger payments on high-interest balances to save money in the long run. Focus on variable-rate balances first as they're costly when rates are high.
It's also worth calling your card issuers to ask about lower APRs or balance-transfer offers. If you're feeling overwhelmed by multiple balances, debt relief services may help.
7 secrets to pay off debt FAST!
Check Your Credit Report
Review your credit report for errors or inaccuracies that could impact your score. You’re entitled to a free weekly credit report annually from each of the three major credit bureaus (Experian, Equifax, TransUnion) via AnnualCreditReport.com. For complex credit issues, credit repair services can provide additional support.
Planning to apply for a mortgage, car loan, or refinance? Keep your credit utilization below 30% to improve approval odds and rates.
4) Investments: Realign for Your Goals
A quick check of your investment mix can confirm you're still on track with your goals, risk tolerance, and timeline. Every year-end financial checklist should include this step.
Rebalance Your Portfolio
Changing life situations and your overall financial situation can cause your investment portfolio to drift from your target asset allocation. Rebalancing ensures your investments align with your risk tolerance and financial goals. If you've experienced something significant this year, like buying a home or having a child, it might be time to revisit how much risk you're comfortable taking on.
Tax-loss harvesting can offset gains in taxable investment accounts, but trades must settle by Dec 31. Review your automated investing settings and reconfirm your dividend reinvestment preferences.
Consider Gifting Stocks
Transferring appreciated stocks to family members in lower tax brackets or donating them to charities can provide tax bill advantages while supporting your loved ones or causes you care about.
5) Personal and Family Financial Planning: Secure Your Legacy
Year-end is the right time to protect what matters most. Add these to your year-end financial checklist: reviewing insurance, beneficiaries, and education savings plans ensures your family's finances stay aligned with life changes.
Review Insurance Coverage
Life happens, and your insurance needs may have changed over the past year. Reassess your health, life, home, and auto insurance policies to confirm they provide adequate protection. Compare deductibles and coverage limits with your current expenses, and note open-enrollment timing for health insurance.
Update Beneficiary Information
Major life events like marriage, divorce, or the birth of a child are great reminders to update beneficiary designations on retirement plan accounts, life insurance policies, and wills. Beneficiary designations override wills, so review them after any major life event. This small step can prevent complications down the road. Also review your will and durable power of attorney documents.
Contribute to 529 Plans
If saving for your children’s or grandchildren’s education is a priority, consider contributing to a 529 college savings plan. Contributions made before year-end may qualify for state tax benefits, though most states set their deadline at Dec 31, while some allow payments until Tax Day. Contribution limits and state-specific tax incentives may adjust between 2025–2028.
6) Strategic Purchases: Plan Ahead for Tax Benefits
Business owners and freelancers have an opportunity to reduce taxable income while investing in tools that improve efficiency for the new year.
Make Tax-Deductible Purchases
For small business owners or freelancers, investing in deductible expenses like office equipment or software before year-end can lower taxable income and enhance productivity. Under Section 179, eligible business purchases (equipment, software, vehicles) may qualify for up to $1.22 million in tax deductions for 2025 (indexed through 2028). Items must be purchased and placed in service by December 31. Home-office equipment, professional tools, and software renewals also qualify if used for business. Deduction limits and eligibility vary by business structure, so you’ll want to consult a CPA for specifics.
And don't forget — education costs count! Now may be the perfect time to join a financial coaching program like Million Dollar Year. (Hint: if you check out our free workshop, we'll offer you a special price to join!)
8 business expenses to write off!
7) Set Goals for the New Year: Prepare for Success
Completing this end-of-year financial checklist is just the beginning. The real payoff comes when you channel what you've learned into clear goals that guide your decisions all year long.
Outline Financial Resolutions
Reflect on your financial progress this year and set clear, actionable goals for the year ahead. Whether it’s increasing your savings rate, investing more, or eliminating debt, having defined objectives can keep you motivated. Here are some of our top ideas for financial resolutions:
- Increase emergency savings to six months of expenses
- Max out IRA by next Tax Day
- Pay off one credit card by mid-year
- Automate payments or transfers into savings or investment accounts
Consistency, not perfection, drives long-term progress. Revisit this checklist each fall to keep your financial plan on track.
Set Yourself Up for Success — This Year and Beyond!
Following our end-of-year financial checklist can have a huge impact on your financial health, both now and in the future. By addressing the essential money tasks on our end-of-financial-year checklist, you’ll not only maximize your opportunities for savings and growth but also start the new year on solid financial ground.
Ready to get committed to changing your financial future? Join our free workshop on how to master your money! We'll teach you our signature Aligned Money Method for stress-free money management.
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