Use this free year-end financial checklist to get back on track with your personal finances
The end of the year is a great time, not just for the holidays and to remember the year, but as a chance to look forward to all our goals and dreams.
Reaching those financial goals means making sure you’re ready to get all that’s possible from your money. That means the usual budgeting and saving but also making sure you get the easy money available through just a little bit of planning.
A Goal without a plan is just a wish.
Antoine de Saint-Exupery
That’s why each year, my wife and I sit down to our year-end financial checklist. It’s a way not only to make sure we’re on the right track but it also helps bring us closer together in our goals. That idea of having matching financial goals and the same level of commitment is so important and it will stop 99% of the money arguments you have with your spouse.
I’m sharing our end-of-the-year personal finance checklist here in the hope that it will do the same for you, to help you reach your financial goals and bring your family closer together.
Click here to download a free copy of this Year-End Financial Checklist
Free Year-End Financial Checklist for Personal Finances
Personal Finance Checklist
An emergency fund is absolutely critical but so often neglected by most people. I know it sucks to have money just sitting there in an account but you really don’t know when you’ll need it.
It’s not as easy as just using credit cards or investments if an emergency comes up. Those investments are for a very specific purpose and withdrawing your money starts a bad habit. Using credit cards will increase the pain of the emergency expense with interest and could send you into a debt spiral.
The rule used to be three- to six-months’ worth of expenses for an emergency fund. I think you can probably get by on the low-end of this and then just have some of your investment money set aside in safe bond funds just in case.
Even if you don’t keep a monthly budget, it’s a good idea to look back on your spending at least once a year to see where your money is really going.
Write out all your spending for the last three months and this year-end financial checkup could surprise you. Keep an eye on how much money you’re paying in interest and where the little things are that can easily be cut to save money.
Investing and Spending Financial Checklist
There are four types of investing and spending accounts that will be the smartest financial decisions you ever make.
These accounts offer special tax benefits you don’t get anywhere else. In fact, through my years as a wealth manager for the rich, these were the #1 places the rich always had money. Taking advantage of these free money opportunities is a must!
- Max out the contribution in your company’s 401K to get the full employer match. This is free money plus no taxes for decades. This is your priority in the list.
- If you have extra money you can invest, max out your contribution into an IRA or Roth IRA. I like to put money in an IRA each year and then periodically convert some of it to a Roth account.
- Get a triple-tax benefit for education costs through a 529 account
- Save all you can on the high cost of healthcare with a Health Savings Account
End of Year Spending Plans Checklist
A Flexible Spending Account (FSA) can be a great way to save on things you’ll need to pay anyway like childcare and medical procedures. The problem is that money in these accounts often expires if you don’t use it within a certain amount of time.
- New eye-glasses
- Chiropractor and acupuncture visits are allowable
- Lasik surgery and non-cosmetic dental care are covered
- Weight loss programs are allowed if your doctor deems it necessary
There are also a lot of allowable expenses for childcare for which you can use FSA money by year-end. If you need, you can also ask to pre-pay some of next year’s expenses.
This is one of the best places to look in your year-end financial checklist because this money is gone if you don’t use it.
Year-End Financial Planning
This one might not be applicable to everyone but is a great way to lower your tax bill before year-end. It will depend on how much you made this year versus how much you can expect to make next year. When in doubt, opt for lower taxes now rather than later.
Some employers will let you take your last paycheck later, in the next year, to lower this year’s reportable income. This is easier if you run your own side business and can ask clients to wait a week or two to pay.
If you’ve ever thought about starting a side hustle, now is the time to start paying those expenses to get started and lower your tax bill for this year. If you’re spending more on the business than it’s earning, you can take those losses to decrease your regular income and the amount you owe in taxes.
Year-End Financial Checklist for Goals
A year-end financial checklist wouldn’t be complete without thinking about your goals for next year and the long-term financial goals you want to achieve.
Make sure you’re working into your budget any big spending plans you have over the next year or two. This includes everything over a thousand dollars like vacations, a new car (or just new to you), down payments on a house and any other plans.
Use this opportunity to make your financial goals as well like paying off debt or saving for retirement. Make short-term goals with a milestone you can reach in a few months to motivate you to keep going. It’s much easier to keep on your goals if you’re constantly hitting those wins than if the only time you check them is the end of the year.
Using a year-end financial checklist is a great way to stay on track with your money but not have to spend time every month watching it. Just a couple of hours to check your financial health at the end of the year can mean a year of freedom from money problems. Doing this year-end personal finance checklist is also a great way to motivate you to achieve your goals.