8 Financial Year-End Tips

The end of the year can feel like a whirlwind of activity, in between gift shopping, family celebrations, and company parties. But the end of the year is also an opportune time to plan your finances for the year ahead. So consider taking a breather from the holiday rush and spending a few hours on the following financial year-end tips. The peace of mind you gain may even increase your enjoyment of the time you spend with family and friends over the holidays.

  1. Sign Up for Quicken or Mint If you don’t already use a program for personal financial management, then now is an opportune time to start. Both Quicken and Mint allow you to see your financial world at a glance by placing all your account information in one location. You can also create budgets, pay bills, and get insights into your spending and saving habits.

  1. Make Sure Your Expenses Reflect Your Values Once you have signed up for Quicken or Mint, you can analyze your spending over the past year to make sure it reflects your values. For example, if you value charity, you can determine whether you have been sufficiently donating to your favorite causes. If not, you can then budget more money toward charitable giving in 2018, perhaps reducing discretionary spending (like your daily latte) to make sure you reach your goals.

  1. Review Your Subscriptions and Memberships Do you really need a gym membership when you have great walking trails near your home? Are your magazines piling up because you are too busy with family and career to read them? The costs for subscriptions and memberships can add up fast, draining money that you could have used for something more important to you. Take a look at these recurring expenses, and if you are not making good use of them, consider letting them lapse when the time comes to renew.

  1. Build Your Reserves You should have at least six months in living expenses saved. But you should also build reserves for expenses that could set you back—say, an emergency repair or a kitchen remodel. If you have home improvement goals, then you can anticipate the costs and start saving for them now. Home maintenance issues can be less predictable, but if you know a costly new roof is in your future, consider increasing your reserves now. That way, when the time comes, your budget can more easily absorb the expense.

  1. Plan for Vacations The end of the year may be an ideal time to think about your travel plans for the following year. Do you want to take a couple of shorter getaways, or do you dream of an extended holiday? Where would you like to go? Do some research to estimate the cost of air travel, hotel bookings, etc. Then take the total and start putting money aside each paycheck to pay for your time away.

  1. Increase Your 401(k) Contributions If you have not maxed out your 401(k) contributions, then consider contributing more before December 31. Meanwhile, take a look at your budget for next year and see whether you can afford to set aside more of your paycheck toward your 401(k). At the least, try to get your full company match, if you aren’t already doing so. For 2018, the most you can contribute will be $18,500 (or $24,500 for people 50 and older).

  1. Talk with Your Family Once you have a good understanding about your budget and financial goals for the year, talk with your family, especially your kids. Children who are taught sound money management principles will have a foundation to become financially responsible adults. The article “15 Ways to Teach Kids About Money” offers ideas to teach your children about personal finance.

  1. Pick Your Investments Make your investment portfolio part of your year-end financial review. If your portfolio has strayed from its ideal weighting of assets, then rebalance as necessary. And while you are rebalancing, make sure your portfolio follows the principles of diversification to insulate you against down markets and support you in up markets. Finally, one recommendation: If you don’t understand the thing you are investing in, then don’t buy it. (Bitcoin, I am talking about you.)

We hope these eight year-end financial tips help put you on the road to financial well-being. And if you could use the assistance of a fee-only planner on that road, feel free to contact us to get started.

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