The year is coming to a close. This is time for reflection, relaxation, and a little last-minute preparation. If you’re wondering if you’ve checked the right boxes financially this year, we’ve created a nice year-end financial checklist to help.
Knowing everyone’s family situation is different, not everything on this list will pertain to your specific situation. That being said, there may be year-end financial to-do’s that have escaped your mind. Taking care of them before the end of the year might just make your new year that much brighter!
Without further delay, here’s our year-end financial checklist!
Revisit Your Budget
Remember that budget you made that one time and never looked at it again?
Well, if you’re wishing that your finances were looking a little better, it may be time to revisit your budget. It’s hard to improve our finances if we’re not tracking our finances.
With the few weeks we have before the new year, detail your income and your expenses. Write down how much you make each month and how much you spend each month.
December may be a disaster of a month for tracking holiday shopping, but you’ve got to start somewhere, right? A great place to start is with your credit card and bank statements. Review the past few months of statements and calculate what you typically spend each month.
Start with the big expenses:
- Utility Bills
This exercise may be extremely revealing for you. You may find some trouble spots that are really dragging down your ability to eliminate your debt and build wealth.
If you’d prefer to utilize technology to help you out, check out our list of the best budget apps for families. Most of these free or cheap apps sync up your bank accounts so you don’t have to import the numbers manually. It saves you time and saves you money!
Reduce Expenses (for things that don’t matter)
There’s something about the end of the year that makes me want to tidy up and get rid of things that I don’t need. That way you can start fresh in the new year.
Let’s definitely clean up our houses and also clean up our budgets too. Instead of eliminating those things that you and your spouse enjoy, I’d suggest eliminating things that don’t bring you joy.
You’ll start to find them when you look through your budget. Thought like these may pop up!
- “Hey, I didn’t know we were still paying for that gym membership. I haven’t been there all year!”
- “Why is our cell phone bill over $100 per month when I keep seeing these deals for $30/month?” (FYI check out Tello, we cut our Verizon bill in half and haven't seen any difference in coverage where we live)
- “When is the last time we watched something on Hulu? Can we get rid of that subscription?”
You get the idea!
Small changes like these won’t affect your happiness and they could free up thousands of dollars in your budget each year.
Earn $1,000 and Put in Savings
Let’s say you’ve examined your budget and there’s not much you’re spending that isn’t a necessity. Well, you could definitely make more money!
I want to help you earn $1,000 before the month is over. Here are some thoughts on how to get it done:
Sell 10 Things Around Your House on Facebook Marketplace
Our trash can be turned into cash.
Clothes, bikes, toys, video games, furniture … you name it, people may be willing to buy it. Especially during the holidays!
I probably do this once or twice a year and pull in at least $100! Depending on how much stuff you have that has value, you could make $500 or $1,000 with your “stuff” that's just sitting around.
Extra Hours or Overtime
Do you have a job where overtime is an option? This may be the time of year when your employer would appreciate the extra hours and you’d appreciate the extra cash.
It can’t hurt to ask!
Make Money from Your Hobby
You may love photography, writing, or even woodworking. Let's find a way to get paid for it!
Here's a list of 30 side hustle ideas for parents that can pay over $30/hr.
There are thousands of people who have followed their passion and made great money.
They've used this money to pay off their debt, pay off their mortgage and even reach financial independence.
Now, when you get that extra $1,000, consider throwing this money into your Emergency Savings so you don’t have to go into debt for the next Emergency. In uncertain financial times, it’s always good to have some money in the bank.
Increase Workplace Retirement Contributions
With the year coming to a close, it’s time to take advantage of your workplace retirement options like the 401k.
Is there an employer match that you’re not taking advantage of?
Make sure you’re getting all that free money before the year is up. If you’re not sure if you’re doing this correctly, check with your HR or benefits rep to ensure you’re taking full advantage.
If you don’t have a workplace retirement option, you can take advantage of a Roth IRA or Traditional IRA.
Related Content: How to Open a Roth IRA with Vanguard in 8 Simple Steps
Get Term Life Insurance
Last year, the life insurance payout was the highest it’s ever been. Over $100 billion dollars was paid out to life insurance beneficiaries due to the high death rate fueled by COVID-19.
Ask yourself. If you were to die, how would that not only emotionally affect your family but financially affect them? Do they rely on your income (or your work) to survive and thrive?
If the answer is yes, then you should consider a term life insurance policy.
There are many providers out there. I have recommended our Quotacy on my website for the past 5 years and they continue to provide a no-hassle sales experience, online and scan the marketplace for rates that work best for your situation.
There are dozens of other term life insurance providers as well that can help you get the right policy fast.
Contribute More to a 529 Plan
A 529 plan is a college savings plan for your child.
If your state provides a state tax deduction for 529 plan contributions, consider making another year-end contribution.
This additional contribution will not only help your children move toward a future debt-free college experience, but it’ll help you reduce your state taxes as well.
Give Generously (and Randomly)
I'm all about building family wealth! And I'm also all about building family happiness as well.
I believe giving money away adds to true family wealth and happiness. If you have the means this year, consider giving in three different ways:
Charities, Churches, and Non-Profits
This time of year is the lifeblood of these organizations. There’s something about the holidays that opens people’s hearts toward giving. Support your favorite charity this holiday season with a year-end gift.
Family and Friends
We’re all about giving gifts during the holidays. It lets your family and friends know that you care.
Giving Randomly to Neighbors
Have you ever given a big tip to a waiter or waitress? Or money to someone down on their luck?
That’s the type of random act of kindness I’m talking about. Get creative, do this with your kids and your spouse. This could be a fun family tradition in the making.
If you’re looking for a tradition to join in on, don’t forget that we’re doing our Big Tip Tuesday tradition this year!
We’re giving random big tips to people working hard in the service industry and we want you to join us!
If all this giving stuff sounds COMPLETELY out of reach for you this year, don’t worry! You don’t need to give if you don’t have money to give.
But if you want to give more, it all starts with the first point from our year-end financial checklist. And that’s revisiting your budget.
If you want to be more giving, add it to your budget for next year so you’ve got the money saved up. Being generous is a whole lot easier when you have money set aside to give.
I’d be a lot more stingy with my money during the holidays if I didn’t save up for it.
No one likes when I'm stingy either! That’s why I save up to be the person I want to be. A little planning goes a lot way.
Final Thoughts on Year-End Financial Checklist
This year-end financial checklist may not have everything you need, but hopefully, it sparks some ideas on what you need to get done before the new year. If you're going to do anything on this list, start with updating or developing your first budget. It's amazing what happens to our financial situation when we start telling our money what to do!
What do you think about this year-end financial checklist? What would you add to the list?
Please let us know in the comments below.
Great episode ! I really enjoyed the checklist you provided.
Your point about term life insurance reminded me about Indexed Universal Life (which I have been hearing about a lot lately). What is your take on IUL policies/accounts?
Thanks, Christopher! Personally, I don’t like to mix investing and life insurance – and that’s what Indexed Universal Life Insurance is for me. While it may work for some people, I like to separate my investments from my insurance.
I believe that in the majority of situations, a low-cost term life insurance policy helps to cover your family in case of death.
If you decide to go with IUL, be sure to check out the fees associated with the policy you’re signing up for. While term life insurance has a recurring annual premium to hold the policy, you may find it to be substantially less expensive and provide you with the coverage you need.