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7 End-of-Year Financial Planning Tips


With the end of the year quickly closing in, there is no better time to take inventory of your financial situation. Evaluating, budgeting, and planning your finances all require attention on a regular basis in order to be successful.

Consider the following financial planning techniques in order to end strong and start your new year with your best foot forward:

1.      Evaluate This Year’s Financial Plan Progress: If you created a financial plan for this year, now is a great time to assess the goals you set to achieve. What did you accomplish and what goals can you complete in the time remaining? If there are long-term financial goals that you didn’t meet, consider moving them to next year’s financial plan if they are still relevant.

2.      Don’t Forget About Your 401(k): Does your employer match your 401(k) plan contributions? If so, you don’t want to miss out on those helpful tax deductions. Also, you don’t want to miss contributing the maximum amount you can to your 401(k) and taking advantage of the ‘free money’ match from your employer. Because each company has different matching limits, be sure to check with HR as soon as possible.

3.      Use the Balance of Your Flexible Spending Account (FSA): If you have an FSA, then now is the time to check your unspent balance, as some plans have a policy that will cause you to lose your money at the end of the year if it isn’t spent. If you do have a balance, consider getting that checkup you’ve been putting off, treat yourself to a new pair of eyeglasses, or stock up on medicine.

4.      Consider Any Upcoming Life-Changing Events: If your employer is struggling or planning job cuts, or if you want to change jobs, do you have enough cash on hand while you look for a new position? Are you thinking about purchasing a new home in the near future? Or, if you have unexpected medical expenses, how will you meet what is potentially a high deductible in your health insurance policy? Answers to questions like these are important to think about when planning for the year ahead. 

5.      Review or Create Estate Planning Documents: Your wishes can change over time, and your will or other estate planning documents should reflect your current desires. Take time at the end of each year to review your trusts and wills; if you don’t have them yet, then don’t delay. Unexpected deaths can put a family’s finances in jeopardy. The best way to protect your family if something happens to you in the future is to plan for it now. 

 6.      Review Expenses: Many people are unsure of how much money they spend each month and how they’re spending those dollars. If you keep receipts, review them to discover how much of your money goes to each category (housing, food, transportation, clothing, recreation, etc.).  This will give you an opportunity to fine-tune areas where you are frivolously spending. And, if you haven’t kept track of your monthly spending, the new year is a perfect time to begin this healthy and helpful habit.

7.      Assess Your Investment Risk Tolerance: It’s important to align your individual financial goals with a strategy to achieve them. A simple investment risk tolerance assessment can help determine whether your current plan is appropriate for your situation, and can help guide any adjustments as you begin the new year. 

To achieve your financial goals, staying on top of financial planning is necessary and never-ending. The end of year is an ideal time to assess your current situation and determine what changes can help you better reach your goals next year.

Want to find other ways to fine-tune your financial plan? Contact your AWM&T Relationship Manager, who can help create a financial plan that will provide the highest level of financial stability and security you desire for your family.