Your December Financial Planning Checklist

ByAshley Hours Categories Financial Planning

As the year draws to a close, December is the perfect time to tie up loose financial ends and set the stage for a prosperous new year. Let’s go over our comprehensive guide and checklist to ensure you wrap up the year on solid financial footing.

1. Review and Optimize Your Budget

  • Analyze Spending Habits & Tweak Your Budget: Review your annual spending to identify patterns, unexpected expenses, and areas for improvement.
  • Set Year-End Goals: If you aimed to save or invest a specific amount, confirm whether you’re on track or need to make adjustments to hit your goals.

2. Maximize Tax Benefits

  • Contribute to Tax-Advantaged Accounts:
    • Max out contributions to your 401(k) or 403(b) (limit: $23,500; $31,000 if over 50).
    • If you have a Health Savings Account (HSA), ensure you’ve reached the contribution limit ($4150 for individuals; $8300 for families, with a $1000 catch up over 50).
  • Harvest Tax Losses: Identify any losses within your investments and capture the losses before year end.
  • Check Charitable Donations: If you itemize deductions, ensure all charitable contributions are recorded and consider making last-minute donations to maximize deductions. Explore the power of Donor Advised Funds.

3. Conduct an Overall Protection & Financial Health Check

  • Review Insurance Coverage: Evaluate whether your current health, life, and property insurance policies meet your needs.
  • Audit Emergency Funds: Ensure your emergency funds is sufficient to meet you and your families needs.
  • Debt Review: Tally your outstanding balances and create a repayment strategy for high-interest debt

4. Prepare for 2024

  • Set Financial Goals: Think about savings targets, travel plans, or major purchases for the new year.
  • Adjust Monthly Contributions: Reevaluate your automatic savings or investment contributions to align with your goals. Remember to increase or adjust your retirement contributions starting in January to reflect 2025 retirement limits.
  • Update Financial Records: Ensure your will, power of attorney, and beneficiary designations reflect your current wishes, especially if you had any major life changes during the course of the year.

5. Perform a Cybersecurity Check

  • Review Passwords: Update weak or reused passwords for financial accounts.
  • Enable Two-Factor Authentication: Protect sensitive accounts with added security.

6. Reflect and Celebrate Progress

  • Celebrate Wins: Acknowledge your financial milestones, big or small.
  • Learn from Setbacks: Identify obstacles and create strategies to overcome them in the coming year.

December’s busy holiday schedule can make it easy to overlook financial priorities, but dedicating time to these tasks can pave the way for a stress-free end of the year and strong start to 2025. Whether you’re fine-tuning your budget, maximizing tax benefits, or setting goals, each step can help strengthen your financial picture. If you have any questions on your year end financial review, email info@shermanwealth.com or schedule a complimentary intro call here. Now let’s finish the year off strong!