Financial Moves To Make Before The Year Ends

Before the new year starts and you begin to tackle your resolution, set yourself up to be in the best possible financial situation by January 1. Some money moves you can make now will affect the next tax season, take advantage of resources, and prepare you for the next year.

Donate To A Good Cause*

You are in the generous spirit anyway from the holidays, so keep that generosity flowing by donating to your favorite cause by December 31. This leaves you feeling good about your kind deed, plus it can be deducted as a charitable contribution the following tax season!

Max Out Your Retirement Savings*

Did you know there is a cap on how much you can contribute to your 401(k) annually? Before the year ends, look up how close you are to that cap and max it out! By contributing more to your 401(k), you decrease your gross annual income which can affect which tax bracket you are in for the following tax season.

Check Out Your High-Yield Savings Account’s APY

If you have a high-yield savings account, check your current APY (annual percentage yield) interest rate. Is it different from when you opened the account? Evaluate how much you have in that savings account and determine if you want to move it to another account with a higher rate or increase the funds currently in the account.

A high-yield savings account is better than traditional savings account. Offering higher APY interest, you get higher monthly dividends just by letting your money sit! Learn more about how to utilize high-yield savings here.

Use Up Remaining FSA Funds

Do you have a Flexible Spending Account? If you do, you should check how many funds you have left for the year. These funds are deposited to your account at the beginning of the year, and you must use them by the end of the year or lose them.

So, if you need a new pair of glasses or forgot to set up an annual checkup with your doctor, dentist, or eye doctor, squeeze these purchases in before you lose the funds!

Note: Some employers offer grace periods that extend the deadline into the next year, but once that deadline rolls around, you still lose any unused FSA funds.

Write Down Goals For Next Year

Before you start thinking about the new year and your goals, reflect on what you accomplished this year. Did you get your dream car? Buy a new home? Complete a renovation project? Start a family? You can build on your momentum and create goals that complement these accomplishments. If you didn’t quite reach your goals this year, it’s okay! Create a new goal list with more reachable accomplishments.

Once you evaluate what you want to achieve, write it down and start working towards it! It can be as simple as opening a savings account to having enough funds deposited for emergencies. Or, it can be saving enough for a down payment on a home. Whatever your goals, you have a whole new year to complete them.

*This was not written by a tax professional. Consult a tax professional to learn more about this options.