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“Maximize Your Savings and Make Your Finances Shine Before the End of the Year!”

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Time passes quickly, and it’s easy to lose sight of the most important tasks. Toward the end of the year is the perfect time to review your personal financial planning investments and decisions that could have a lasting effect on your finances. In this article, we look at how to end the year on the right foot and maximize your savings.

Review Your Financial Statements

Take the time to review and evaluate your income and expenses from the current year. Ask yourself, are you setting aside enough money for savings? Are you putting too much of your income towards debt repayment? Are you doing better or worse than you did in the previous year? Once you have an understanding of your financial situation, you can create a budget for the upcoming year that will help steer you towards your goals.

Taking a moment to also assess your net worth can provide valuable perspective. Compare it to the previous year’s worth and analyze why it changed. Any growth in your assets or reduction in your liabilities will contribute to an increase in your net worth. This is the ultimate goal of any financial plan.

Year-End Tax Considerations

As you prepare for the new year, be sure to maximize contributions to pre-tax retirement accounts like your 401K. Take advantage of the increased contribution limits for IRAs, Roth IRAs, and other retirement plans and invest as much as you can without surpassing the maximum. Deposits to health savings accounts and 529 savings plans can also save you money down the line and bring additional tax benefits.

If you’d like to contribute to charity, it’s best to do so before the end of the calendar year. You can even use highly appreciated property or transfer funds directly from an IRA account. Try to estimate your capital gains distribution for the year and decide if it’s wise, according to the advice of a tax professional, to sell off any investments to reduce your taxes for 2023.

Revisit Your Investment Portfolio

The stock and bond markets have been volatile, and interest rates have risen quickly, so it’s just as crucial to review your investment portfolio. When markets undergo changes, it’s important to adjust your investment allocation. See if you can get better short-term interest rates and that your investments are going according to plan.

Check Your Insurance

Reviewing your insurance coverage from time to time is a smart decision to make. Make sure you and your spouse each have enough life insurance. Do you need plans in place to cover you in case you become disabled and experience a loss of income? Consider if you’re adequately covered in terms of home and auto insurance. A few additional policies, like an “umbrella” liability policy or an identity theft protection plan, to protect your interests may be worth the investment.

Finally, examine your estate plan and make sure the proper legal documents are in place. Double-check the employee benefits you’ve selected for the coming year and your credit reports to see if there are any issues to address. Crafting a comprehensive financial plan for the year is what ends a successful year.

Happy holidays and best wishes for 2024!

Chris Walden, a CERTIFIED FINANCIAL PLANNER professional and advisor at Heartland Capital Advisors, LC, believes that the end of the year is the perfect time to review your financial planning and investments to optimize your savings. Make sure to look over your annual budget and net worth statement, review your investments, insurance coverage, and more. Doing these things will ensure that you are on the right track to meet all of your financial goals in the new year.