Do these 10 things with your money before the year is over

It can be a busy time of year, but there’s one thing that’s definitely on your to-do list: getting your end-of-year finances in order.

Making time in your schedule to do the following things can pay big dividends in the new year, from lowering your taxes to maximizing your savings. Here are the 10 things you need to do before the year is out so you can achieve financial success in 2025.

Read more: Money advice doesn’t have to stress you out. Keep it simple with these 6 expert tips

10 money moves to make before the end of the year

Start 2025 on a strong financial footing by doing these things now.

1. Use your remaining FSA funds

Flexible spending accounts, or FSAs, are typically use-it-or-lose-it accounts. This means that you generally cannot transfer money from one year to the next. If you have any money left in your FSA, make sure you spend it before December 31st.

You can use your FSA money for many items, including contact lenses, prescription drugs, and bandages.

2. Maximize your pension contributions

“The more money you can put in a retirement account, the better,” he says Chris Berkelinvestment advisor and president at AXIS Financial. There are limits to how much you can put into a 401(k) or IRA each year, and contributing as much as you are allowed can help you reach your savings goals faster.

“If you plan to contribute to a retirement account in the near future, take advantage of the current limits to maximize where possible,” Berkel said.

3. Consider donating to charity

Donating to charity can be very rewarding. And your donations not only provide warm feelings and a good night’s sleep. They can also help you when tax season arrives.

You can write off cash contributions to charities on your taxes up to a maximum 50% of your adjusted gross income. This can reduce your taxable income and possibly put you in a lower tax bracket, meaning you pay less tax.

4. Check your insurance policies

Insurance is an essential part of a balanced financial strategy. But it may be that your insurance coverage no longer suits your personal or financial situation. For example, major life events such as a marriage or the birth of a child can have a significant impact on the coverage you need.

Review your car insurance, homeowners or renters insurance, health insurance and other policies and consider how your needs may have changed over the past year. Then compare other providers to make sure you’re still getting the best possible deal.

5. Review and rebalance your investment portfolio

You should rebalance your investment portfolio at least once a year. This ensures that your investments stay on track and help you achieve your goals. And Emily LukeCFA, CPA, CEO and co-founder of Plenty, says rebalancing doesn’t have to be cumbersome.

“You don’t need to make material changes to what you invest in unless you’re getting closer to big milestones like buying a house or retirement,” says Luk.

What should you do? “The biggest investing mistake adults make today is holding too much cash,” says Luk. “So before you start rebalancing your investment portfolio, you need to rebalance your money.” That means making sure you have three to six months’ worth of expenses in an emergency fund and for goals you want to achieve in the coming year.

Once you have your cash holdings squared away, you can think about what your asset allocation should look like. One way experts recommend this is based on your age. For example, if you’re 25, consider keeping 25% of your investments in lower-risk assets, such as bonds, and 75% in higher-risk assets, such as stocks. As you get older, your risk appetite will likely decrease, which would cause you to shift more money into lower-risk assets.

Then consider diversifying between asset classes. To diversify your stock holdings, you can, for example, invest in low-cost index funds. These funds use investments from large groups of investors to build various portfolios that track indexes such as the S&P 500 and the Dow Jones Industrial Average. You can diversify your bond holdings with exchange-traded funds (ETFs) that track Treasury bonds and other government-backed securities, as well as bonds from issuers like Vanguard.

Contact a financial professional to determine the best investment strategy for you.

6. Update your beneficiaries

There are several reasons why you may want to change the beneficiaries of your insurance policies and estates. Perhaps your children have grown up and no longer rely on you as much as they did in the past, or perhaps you have a new spouse to support.

It is important to regularly check your beneficiaries and ask yourself whether your current list is correct according to your wishes. If not, now is a good time to update it.

7. Check your interest rates

The interest rate environment is changing rapidly. The Federal Reserve has cut the fed funds rate twice in recent months, and more rate cuts are expected in the coming months. This can affect your money in several ways.

Here are a few things to consider to make current interest rates work in your favor.

• Savings accounts: High-yield savings accounts can pay annual percentage rates, or APYs, of up to ten times the national average interest rate (or more). If your money is languishing in an account with a paltry APY, switching to a HYSA can help you grow your bottom line faster. And now that interest rates are set to drop, the sooner you open one, the more interest you can earn.

• CDs: A certificate of deposit is an excellent way to lock in current APYs before further rate cuts. Unlike savings accounts, which have variable interest rates, your CD interest rate is fixed when you open an account, so your returns stay the same even if the Fed cuts rates again. And if you have a CD that’s maturing soon, make sure you check the competition’s rates before rolling it over.

• Mortgages: Mortgage interest rates are falling. Market interest rates are currently around 7% and are expected to fall to around 6% by the end of the year. If you bought your home when interest rates were peaking, you may want to consider refinancing. The general rule of thumb is that if you can reduce your rate by at least 1%, it may be worth it. That said, rates could fall into the mid to high 5% range over the next year, so keep that in mind when making your decision.

• Debts: If you have high-interest debt, such as credit cards and personal loans, you may be able to take advantage of recent interest rate cuts to consolidate your debts and pay off your balances faster.

8. Consider a Roth conversion

With traditional retirement accounts like 401(k)s and IRAs, you make pre-tax contributions. Taxes are deferred until you start withdrawing money from your retirement account. You may be able to maximize your tax benefits by converting your traditional retirement account to a Roth IRA.

With a Roth IRA, you make your contributions with after-tax money. When you then retire, you do so tax-free. That means you won’t pay income taxes on the growth your Roth IRA produces – which could mean significant savings over traditional retirement alternatives. Consider these things when deciding if this is the right route for you.

9. Take required minimum distributions

If you are 73 or older, it is important to take the minimum required distributions from your retirement accounts before the end of the year. If you don’t, the remaining amount you should have withdrawn will be subject to a 25% excise tax.

You can use this calculator to determine your required minimum distribution if you are unsure what yours is.

10. Set financial goals for the new year

Keep the positive momentum going by creating money goals that you can carry into the new year. Examples could be:

• Pay off debts: If you have high-interest credit card debt, your top financial priority should be eliminating it. Make a plan to pay off your debts for good.

• Control your budget: It’s relatively easy to create a budget, but it can be tricky to stick to it. Set a goal to not only create your budget, but master it in the new year.

• Full financing of your emergency savings: Most experts agree that you should have at least three months’ worth of expenses in your savings account at all times. If not currently, aim to fully fund your emergency account by the end of 2025.

• Find the sweet spot for your savings: Do you know how much money you can comfortably save each month? Here’s a guide to doing just that.

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