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6 End-of-Year Financial Moves to Make

Updated: Dec 7, 2022

It's natural for us to do a bit of reflecting towards the end of the year. Here are 6 financial moves you can make now to have a financially successful new year.

Review Your Budget

First thing, first. Are you using a budget?

Budgeting is probably one of the least sexiest things about finance but one of the most critical things we can do to set ourselves up for success. Before I started using a budget template, I really didn't know where my money was going and I had a fabricated, and slightly delusional, view of what my current monthly expenses were. But once I started using a budget, I saw that we were spending about $1,000 more per month than we were bringing home. Yikes! Needless to say, we're doing much better.

You can use the same budget template that our household uses to manage our income and expenses by downloading it here. This template will allow for you to enter in your projected budget and compare it to your actual expenses so that you can see where to improve for the following month's budget. It also has an interactive graph which will allow you to see where you money is going each month.

Review Your Beneficiaries

This is crucial if you've had a big life event such as a marriage, divorce, birth or death of a close family member. Here are a few accounts to check and update your beneficiaries:

  • Life Insurance Policy

  • Retirement Accounts

  • Brokerage Accounts

If you have a minor listed as a beneficiary, listen up!

If you were to pass away and you have a minor as a beneficiary, it can get tricky unless you have things properly set up. Typically, if your account allows you to name a minor as a beneficiary, this matter will have to be settled in probate court, which can be costly and time consuming and the outcome will be that an adult will have to be named to manage the money on the minors behalf. Who gets named may not be the person you actually want to manage the monetary proceeds of your policy.

To avoid complications like the ones mentioned above, by establishing a trust and naming the trust as the beneficiary as well as a custodian who will care for the children on your behalf. Once the trust is the recipient of the money, then the trust can have established rules on how to distribute funds to the minor kids. A Trust lawyer can assist in how to set these documents up to benefit your family and your unique situation.

Increase Your Retirement Contributions

If you're contributing to your employer sponsored retirement plan, consider increasing your contribution by 1%. Let's say you make $65,000 per year before taxes, a 1% increase is about $25 per pay check added to your retirement savings. This amount may not feel like a lot initially but it will add up over time.

If you're not currently contributing to your employer sponsored retirement account, now is the time to start contributing. A lot of employers offer contribution matches, meaning, you contribute $x, your employer will also contribute. Don't turn down this free money.

Write Down Your Financial Goals

What do you plan to accomplish financially this year?

Whether you plan to max out your retirement savings, pay off credit card debt or save up for a vacation, the really important thing to consider here is that you should be writing your goals down. In my Financial Literacy for Kids classes, I teach my young students the importance of creating and writing down their SMART Savings Goals. Did you know that you are 42% more likely to accomplish your goals if you just write them down?

When teaching my students, we also use the SMART Goal template to help structure our savings goals.

Check Your Credit Report

You're entitled to a free credit report per credit bureau (Experian, TransUnion, Equifax) each year. If your credit was pulled for any reason, such as for a job application or for a loan, you also have the option to receive a copy of your credit report for free at that time as well.

Check your credit report for any of these red flags

  • Accounts you didn't open

  • Incorrect DOB, address or work history

  • Incorrect payment history

  • Late payments that are still on your report after 7 years

If you've created an account with one of the credit bureaus, they make it really easy to dispute inaccuracies online. In the olden days, we use to have to write a letter to the credit bureaus and wait for a response. Progress! An alternative to going to each bureau is to use to gain access to your credit reports.

Pro Tip: Don't access all of your reports at once. Space them out throughout the year so that you can keep an eye on your credit activity throughout the entire year. For instance, you can access credit report 1 now, access report 2 in four months and then credit 3 four months after that.

Spend Outstanding FSA Dollars

If you have a Flexible Spending Account (FSA), then you have until the end of the year to spend those dollars. FSAs are use-it-or-lose-it accounts, unlike HSA's, which does not expire. You can use your FSA money on things like dental work, contact lenses or glasses, or prescriptions. You won't be able to use this money for delayed services such as buying gift cards to use in the next year for services.

What other financial moves would you add to this list?

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