The holiday season can oftentimes feel like a blur. You’re so busy – maybe wrapping up a year-end project for work, creating holiday magic for your kids, traveling to visit family members, or volunteering. It can be easy to let your financial plan go to the wayside.
To help you check in with your finances, we’ve compiled a list of five things to consider before the end of the year. And if you’re feeling overwhelmed with the hecticness of the holidays, just choose one or two to tackle each week and you’ll be on your way to feeling more in control of your financial wellbeing.
1. Review your spending
You’ve got your Spotify Wrapped, but what if you had a yearly wrap-up for your credit card? The good news is most credit cards do provide a year-end report to help you assess your spending. There’s nothing wrong with getting a daily coffee, contrary to some financial influencers, but maybe that’s not where you actually want your funds to go. Taking a look at your spending over the past year can help you readjust your goals and budget to keep you on track with your financial plan.
2. Plan for any additional retirement contributions
While there isn’t a lot of time left to change your 401(k) contributions this year, perhaps you receive a year-end bonus and can contribute a portion towards your retirement savings. This can be especially beneficial if your employer provides matching; plus, you get an added bonus of paying less in taxes with a pre-tax contribution.
Additionally, you may want to consider contributing to an IRA. You’ll have until April’s tax deadline of next year to make this contribution. In 2023, individuals can save $6,500, or $7,500 if you’re 50 or older. Diversifying your savings with a Roth IRA can also be beneficial, but talk to your financial advisor to assess what options would help you accomplish your goals.
3. Evaluate your withholdings
Take a minute to consider your tax withholdings from your paycheck. To check if you’re withholding the right amount, you can use the IRS tax withholding estimator. While some budget their tax refund for large expenses in the new year, keep in mind that the IRS doesn’t pay you interest on the money it withholds. If you lower your withholding, you’ll have more money each paycheck for saving and investing; thus, more opportunity to earn a return on those funds.
4. Consider freezing your credit report
It can sometimes seem like every day there’s a new data breach. To help stay proactive and one step ahead of fraud, consider freezing your credit. The process is fairly simple and you can request a freeze online through the three major credit bureaus. Check out our blog on protecting your credit and identity for more resources. Keep in mind that if you’re making a purchase that involves a credit check, you’ll have to temporarily unfreeze your credit.
5. Set intentions for the new year
Instead of waiting until New Years Eve to set resolutions, set aside some time to intentionally plan out what you want the year ahead to look like for you. What financial goals do you have? Maybe you want to pay down debt or save for a home. Maybe you’re unsure of where to start and set a goal of finding a financial advisor in the new year. Whatever your situation, a new year can be a fresh start and setting intentions can be helpful in manifesting your dream life – financially or otherwise!
December can be a great time to reflect on the past year and set goals for the year ahead, both personally and financially. To help keep your financial wellbeing in mind, consider these five tips before the year ends. And to help you stay on track all year long, download our free calendar for total wealth management.
