Organize Your Finances With Our Year-End Financial Checklist

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"Manage my finances better" is a perennially popular New Year's resolution (along with losing weight). This year-end financial checklist won't help you shed pounds, but it can help you achieve your financial goals. Use it to assess your financial situation, prepare for tax time and get your finances in shape for the coming year.

Prepare for Tax Time

  • Gather the documents you need to file your taxes, including:
    • Last year's tax returns.
    • Tax forms from employers and financial institutions including W-2, 1099, 1098 and 1095 forms. These must be mailed to you by January 31, so you may not have them yet; make a list of which ones you expect so you can be on the lookout.
    • Receipts supporting any tax deductions you plan to take, including medical expenses, child care expenses, educational expenses and charitable donations.
  • Use the IRS' Tax Withholding Estimator to confirm that your employer is withholding the right amount of taxes from your wages. If you need to adjust your withholding, complete a new W-4 form for your employer.
  • If you received unemployment benefits this year, visit the IRS website to see if they are taxable.
  • If you expect your income to grow or shrink substantially in the coming year, talk to your tax preparer about steps you can take to reduce your taxes going forward.
  • Before December 31, make any last-minute moves such as:
    • Making charitable contributions.
    • Using up your Flexible Spending Account (FSA). Employer deadlines for this may vary.
    • If you have a high-deductible health plan, consider opening a Health Savings Account (HSA). Money you contribute is tax-free; you have until April 15 of next year to contribute to an HSA for this year.
  • If you expect a tax refund, decide how to use the money, such as:
    • Paying down debt
    • Starting or adding to your emergency fund
    • Contributing to a retirement account
    • Putting it toward next year's tax bill
  • If you expect to owe taxes, make sure you've set aside enough money to pay them.
  • Make an appointment with your tax preparer.

Go Over Your Budget

  • Review this past year's budget. What did and didn't work for you?
    • If your current budgeting methods and tools aren't working, look for a better way to track your spending.
  • Assess your income and expenses, looking for places to save money.
  • Revise your budget to reflect any changes to your income or expenses in the new year.
  • If you don't have a budget, here's how to make one.

Assess Your Savings

  • Evaluate your emergency fund. Will it cover three to six months' worth of expenses? That's the goal, but even if you haven't saved that much, continue to work toward building up this important safety net. If you don't have an emergency fund, start one.
  • Do you need to save for any big expenses or goals next year? If so, develop a budget for this so you can start setting aside the money you'll need.
  • Consider setting up automated transfers to your savings account(s) to help build your emergency fund and other savings.

Pay Down Debt

  • Find out if you could save money by refinancing your mortgage, car loan or student loan.
  • If you have high-interest debt, make a plan to pay it down. If you don't have enough extra money in your budget to make a big dent, consider these options:
    • Investigate 0% introductory balance transfer offer credit cards. Transferring high-interest balances to a card with a temporary 0% interest intro period can save you a lot of money in interest. The key is making a plan to pay off the balances before the intro period ends and you begin paying a standard interest rate.
    • Research debt consolidation loans and personal loans. These could offer lower interest rates than you're currently paying on credit cards and make payments easier to manage since you'll just have one payment to make each month.
    • Consider contacting a credit counseling agency to create a debt management plan for you.
    • Consider getting a second job to help pay down debt.
  • Review your credit cards.
    • Could you benefit from a rewards card or cash back card? If you're looking into cards that provide extra perks, make sure you'll be able to pay off the balance each month—otherwise, you could pay more in interest charges than your rewards could earn you.
    • Make sure you're utilizing less than 30% of your available credit for each card and across all your cards at all times. Anything higher could hurt your credit scores.
    • Keep existing credit card accounts open even if you aren't using them; closing them may negatively affect your credit score.

Examine Your Insurance Coverage

  • Set up an appointment with your insurance agent to review your coverage, including homeowners insurance, renters insurance, auto insurance and life insurance.
  • Make sure your life insurance policies list the correct beneficiaries.
  • Consider getting long-term care insurance.
  • Look for ways to reduce insurance premiums, such as dropping unnecessary coverage or increasing deductibles.
  • During open enrollment, review your employer's health, life, disability and other insurance benefits and make your selections based on your current and future needs.

Review Your Retirement Accounts and Other Investments

  • If you aren't already contributing to an employer-sponsored retirement plan such as a 401(k), sign up and set up automatic monthly contributions from your paycheck.
  • If you do contribute to an employer-sponsored retirement plan, try to contribute the maximum allowable amount. At minimum, contribute enough to maximize any employer matching contributions your company makes.
  • If you're over 50, take advantage of catch-up contributions to retirement plans.
  • If you have a 401(k) plan from a former employer, make a plan to roll it over into a new retirement account.
  • Once your employer-sponsored plan is maxed out, consider opening another retirement account such as a traditional IRA or Roth IRA.
  • Review your investment results over the past year and rebalance your portfolio if needed.
  • Make sure all your investment and retirement accounts list the correct beneficiaries.
  • Set up an online Social Security account to estimate your expected retirement benefits and help with retirement planning.
  • If you have children, consider setting up a 529 plan to fund their college educations.

Make or Update Your Estate Plan

An estate plan may include a will, a living trust, a living will, a health care or financial power of attorney and a plan for your funeral arrangements.

  • Make sure your estate plan lists the correct beneficiaries and that your documents are in a safe place.
    • If you've had major life changes since creating your plan, update it accordingly.
  • If you don't have an estate plan, create one.
    • If you have a complex family situation or lots of assets, consult an estate planning attorney.
    • If your estate planning needs are minimal, you may be able to create your own documents at Nolo, LegalZoom, RocketLawyer or other self-help legal sites.
    • If your needs are somewhere in between, many attorneys offer flat-fee estate planning packages at a reasonable cost.

Check Your Credit

  • Get copies of your credit score and your credit report from all three consumer credit bureaus (Experian, TransUnion and Equifax).
  • If your credit score needs help, take these steps to improve it:
    • Pay all your bills on time.
    • Pay down credit card balances to keep your credit utilization rate at 30% or less.
    • Avoid opening new credit accounts unless necessary.
    • Keep existing credit accounts open, even if you don't use them.
    • Sign up for Experian Boost®ø, a free service that can help increase your credit score by giving you credit for on-time utility, cellphone and streaming service payments.
  • Set up credit monitoring to protect your credit. Experian's free credit monitoring service will alert you of changes and inquiries on your credit report and accounts.
  • If you find any inaccuracies in your credit report, dispute them with the appropriate credit bureau.

Organize Your Finances

  • If you'd like professional help with your finances and investments, consider using a financial planner. The National Association of Personal Financial Advisors (NAPFA) is a good source.
  • Go through your financial records, tax documents and financial account statements, shredding any you don't need.
  • Consider digitizing financial records to save space and paper.

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