As the fall air settles in, most of us are thinking about cozy sweaters, warm apple cider, and pumpkin-spiced everything. My personal favorite fall event is taking the kids to a nearby pumpkin patch and a back yard bonfire. Mmhmm, I can almost taste the perfectly charred marshmallows! Festivals and holiday gatherings with family are just around the corner, and as we begin pulling out our winter clothes and getting ready for the cooler season, let’s also plan to do a temperature check on our finances.
So, before we get waist deep in fall cleaning and all things holiday, I want to share a few simple yet powerful steps you can take before December 31st to launch you into the new year.
1. Maximize Your Retirement Contributions
This is the time to ask yourself: Can I do a little more for my future? Consider contributing to or maxing out your IRA or 401(k) contributions. For 2024, the IRA limit is $7,000 (or $8,000 if you’re over 50) and your 401(k) limit is $23,000 (or $30,000 if you’re over 50). Even a small contribution now can make a big difference later. Not only will you be able to withdraw it tax-free when you retire, but you’ll also reduce your taxable income today. It’s a win-win!
2. Give Back—And Reap the Benefits Too
The season of giving is a classic time to make charitable donations, but did you know it can also benefit your bottom line? If giving back is important to you, consider making qualified charitable donations (QCDs) before year-end. Donations to qualified charities made before December 31st can save both you and the organization on taxes. Whether it’s your favorite nonprofit or a local initiative, there’s no better way to close out the year than with some generosity—and a nice tax break, too.
3. Tax-Loss Harvesting: Turn Losses into Wins
Let’s face it—not every investment goes the way we hoped. But if you’ve got some investments that didn’t quite perform this year, you might have an opportunity for tax-loss harvesting. By selling off those underperforming assets, you can offset gains in other parts of your portfolio and reduce your overall tax bill. It’s not as complicated as it sounds! Your advisor can help make sure you’re getting the most out of your investments.
4. Don’t Forget Your FSA!
If you have a Flexible Spending Account (FSA), this is your reminder to check your balance. Many FSAs have a “use it or lose it” rule, meaning you could forfeit any unspent money at year-end. Now’s the time to schedule that long-overdue dentist appointment, buy new glasses, or stock up on healthcare supplies. Don’t let those hard-earned dollars slip away!
5. Revisit Your Budget
It’s easy to get swept up in holiday shopping and celebrations, but before you dive headfirst into spending, take a moment to revisit your budget. How did your financial year go? Did you hit your savings or debt reduction goals? If not, don’t panic—make small adjustments and get back on track. Try scaling back on a few non-essentials so you can go into 2025 feeling financially secure. Put the pumpkin decor down!
6. Review and Rebalance Your Investment Portfolio
With markets constantly changing, your portfolio might not look the same as it did a year ago. As the year winds down, review your portfolio and rebalance if needed. Does your asset allocation still align with your goals?
7. Set Financial Goals for the Year Ahead
Before the New Year’s Eve countdown begins, take a few minutes to reflect on what you want to achieve. Are you hoping to boost your emergency fund? Pay down some debt? Save for a big purchase? Setting clear, actionable goals now will help you start the new year with purpose and direction.
As much as we love this changing season, don’t forget that the end of the year is also a pivotal moment to take control of your financial future. These aren’t just boxes to check—they’re meaningful steps that can set you and your family up for long-term success.
Whether you’re maxing out retirement contributions or simply revisiting your budget, every move you make now is a step toward building the future you want. Don’t wait for the new year to start thinking about your financial goals—start now and set yourself up for success. If you’re feeling unsure about where to begin, we’re always here to help you find clarity and take that first step together.
