You Owe It to Yourself to Make These 10 Money Moves Before the Year Ends

This time of year is full of tasks, but there’s one in particular you should be sure to check off your list: getting your finances in order at the end of the year. Taking some basic steps now will set you up for financial success in the new year — and not doing them means you could miss out on some serious money.

So, set aside some time in your calendar to do the following things before December ends.

Read more: Financial advice shouldn’t pressure you. Keep it simple with these six tips

10 financial moves you need 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 accountsor FSAs, are typically use-or-loss accounts. This means you usually cannot transfer funds from year to year. If you still have money in your FSA, make sure you spend it before December 31st. You can use your FSA funds for many items, including contact lenses, prescription medications, and bandages.

2. Your maximum superannuation contributions

“The more money you can put into a retirement account, the better,” he said. Chris BurkleInvestment Advisor and President at AXIS Financial. There are limits to the amount you can put into a 401(k). Irish Republican Army Annually, and contributing as much as you’re 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 current limits to maximize them where possible,” Burkle said.

3. Consider donating to a charity

Donating to charity can be very rewarding. And your donations don’t just lead to warm feelings and a good night’s sleep. They can also help you when tax season rolls around. You can write off charitable cash contributions on your taxes for up to 50% of your adjusted gross income. This could reduce your taxable income and possibly hit you back Lower tax bracketThis reduces the amount of tax you owe.

4. Review your insurance documents

Insurance is an essential part of a balanced financial strategy. But your insurance coverage may not fit your personal or financial situation. For example, major life events such as marriage or the birth of a child can significantly affect the amount of coverage you need. Review your auto insurance, homeowners or renters insurance, health insurance and other policies and consider how your needs have changed over the past year. Then, compare other providers to make sure you’re still getting the best deal possible.

5. Review and rebalance your investment portfolio

You should rebalance your investment portfolio at least once a year. This ensures your investments stay on track to help you achieve your goals. and Emily LockeRebalancing doesn’t have to be stressful, says CFA, CPA, CEO and co-founder of Plenty. “You shouldn’t make fundamental changes in what you invest in unless you’re approaching big milestones like buying a house or retiring,” Locke said.

What should you do? “The number one investment mistake adults make today is holding on to too much cash,” Locke said. “So before you start rebalancing your portfolio, you need to rebalance your money.” This means making sure you have three to six months of expenses in one place Emergency fund And for the goals you want to achieve in the coming year.

Once you have squared off your cash holdings, think about what your asset allocation should look like. One way experts recommend doing this is based on your age. For example, if you are 25 years old, consider keeping 25% of your investments in low-risk assets such as bonds and 75% in high-risk assets such as stocks. As you age, your appetite for risk is likely to decrease, so you can shift more money into lower-risk assets.

Hence, consider diversifying between asset classes. For example, to diversify your stock holdings, you can invest in low-cost index funds. These funds use investments from large groups of investors to build diversified 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 Treasuries and other Treasury-backed securities, as well as bonds from issuers like Vanguard.

To determine the best investment strategy for you, speak with a financial professional.

6. Update beneficiaries

There are several reasons you may want to change the beneficiaries of your insurance and estate policies. Maybe your children are adults and no longer depend on you as much as they did in the past, or maybe you have a new spouse to support. It is important that you review your beneficiaries regularly and ask yourself whether your current list is accurate to your wishes. If not, now is a good time to update it.

7. Review your interest rates

The interest rate environment is changing rapidly. The Federal Reserve has cut the federal funds rate twice in the past few months, and more rate cuts are expected in the coming months. This is possible Affect your finances In a number of ways.

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

• Savings accounts: High-yield savings accounts It can pay annual percentage yields, or APYs, of up to 10 times the national average rate (or more). If your money is lean in an account with a paltry APY, converting it to a HYSA can help you grow your bottom line faster. And with rates falling, the earlier you open an account, the more interest you’ll earn.

• CDs: A Deposit certificate It’s a great way to secure APYs today before additional interest rate cuts. Unlike savings accounts, which have variable interest rates, the rate of your CDs is fixed when you open an account, so your returns will stay the same even if the Fed lowers interest rates again. Also, if you have CD is maturing soonBe sure to check competitors’ prices before allowing them to be posted.

• Mortgages: Mortgage rates are falling. Market rates are currently around 7%, and are expected to fall to around 6% by the end of the year. If you purchased your home when prices were at their peak, you may want to consider this Consider refinancing. The general rule is that it may be beneficial if you can reduce the price by at least 1%. However, rates could drop to the medium 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 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 begin 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. Then, when you withdraw from your account in retirement, you’ll do so on a tax-free basis. This means you won’t pay any income taxes on the growth your Roth IRA produces, which can provide significant savings compared to traditional retirement alternatives. Consider these things When deciding if this is the right path for you.

9. Take required minimum distributions

If you are age 73 or older, it is important to take required minimum distributions from your retirement accounts before the end of the year. If you do not do this, the remaining amount you should have withdrawn will be subject to 25% indirect tax. You can use This calculator To determine the required minimum distribution if you are not sure about your distribution.

10. Setting financial goals for the new year

Maintain the positive momentum by setting financial goals to stick to in the new year. Examples may include:

• Debt repayment: If you have high-interest credit card debt, your financial priority should be getting rid of it. Create a plan for Pay off your debts For good.

• Control your budget: It’s relatively easy to create a budget, but it can be difficult to stick to it. Not only setting a goal Create your budget but master it In the new year.

• Fully fund your emergency savings: Most experts agree that you should have At least three months of expenses In your savings account at all times. If not now, set your sights on fully funding your emergency account by the end of 2025.

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

More ways to maximize your money