Try Our Year-End Financial Planning Checklist

The end of 2019 is nearly here and if you’re like us, you’re thinking about your finances and what you can do to save money now and in the coming year.

If year end financial planning is on your mind, you’re not alone. At Addition Financial, this time of year is when our valued members come to us with questions about what should be on their year end financial checklist.

So, without further ado, here are our suggestions for your year end financial planning checklist.

Evaluate Your Financial Position

The first thing that should be on your year end financial planning checklist is an honest evaluation of your financial position. If you set financial goals for yourself this year, ask yourself:

  • Am I better or worse off financially than I was a year ago?
  • Have I stuck to my budget?
  • Have I met my savings goals?
  • Have I paid down my debt?

You can’t accurately plan for the coming year if you don’t know where you are financially. It’s a good time to make note of which financial strategies and plans worked for you and which ones didn’t.

Debt Reduction

If you have any debt, then planning how to reduce it is a must. We understand that thinking about debt reduction at the holidays is not everyone’s idea of a good time, but it’s important to be mindful of how your debt could impact you in the coming year.

We suggest adding up your debt and coming up with a plan to pay it down over the next 12 months. We’ve outlined several common debt-reduction strategies and you can choose the one that works best for you. Remember that carrying high debt can impact your ability to buy a home and plan for your future.

Create a Budget

Do you have a household budget that works for you and your family? If the answer’s no, then you may want to consider adding a budget to your year end financial checklist.

Budgeting might seem difficult but it’s an important part of being financially responsible. When you take the time to evaluate your spending and plan what you can afford to spend, you’re less likely to overspend or accumulate unwanted debt. You can try our monthly budget calculator if you need help.

Use the Money in Your Flexible Spending Plan

Does your employer provide a flexible spending plan for medical expenses? If you have a flex plan, this is the right time to check your balance and plan to spend any money that remains before the new year begins.

Flexible spending plans may be used for expenses that are related to your family’s health and well-being, including:

  • Over-the-counter medications
  • First aid supplies
  • Eye exams and corrective lenses

Unlike health savings accounts, the money in flexible spending plans won’t roll over to the new year, so it’s important to spend what you’ve saved.

Money Management Tips and Savings Strategies for Every Budget and Age

Max Out Your Retirement Plan

With retirement getting closer every year, your goal should be to put aside as much money as possible for your golden years. The end of the year is the perfect time to take stock of your year-to-date contributions and – if you can afford it – to max out your contributions.

One way that we suggest is to take your holiday bonus, if you receive one, and roll it directly into your 401K or IRA. You may also want to use this opportunity to increase your contributions for next year if you can – and make sure to take advantage of employer matching contributions if you haven’t already done so.

Evaluate Your Investment Portfolio

Any investments you have should be balanced, with a good distribution of risk across multiple types of investments. Since investment earnings can shift the balance over time, the end of the year is the right time to evaluate your portfolio and make adjustments as needed.

Asset allocation can be confusing, but you can refer to our post about it and consult with your accountant or a financial planner for advice.

Start Saving for Your Kids’ Education

What if you’ve already maxed out your 401k contributions and you get a bonus? One way to leverage it into future financial security is to open a 529 account for your child’s college education.

529 plans allow your money to grow tax free. You can contribute regularly and have a nice nest egg by the time your child reaches college age.

Insurance and Other Considerations

The end of the year is a good time to evaluate your current insurance policies and make sure everything is up to date. You should include:

  • Life insurance
  • Short-term and long-term disability insurance
  • Homeowner’s insurance
  • Auto insurance
  • Business liability insurance

You may want to consider consolidating your insurance policies with a single carrier to save money. Bundling in the insurance industry is common and can help you with long-term financial planning.

Year-end financial planning is a good way to get your financial house in order for the coming year. We hope that you find our year-end financial planning checklist to be helpful.

Need help with your end-of-year financial planning? Click here to learn about Addition Financial’s MEMBERS Financial Services plan!

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