Simple steps to wrap up your finances and start 2025 with confidence
As the year winds down, we naturally start thinking about fresh starts and new goals. While you’re planning family resolutions or dreaming about next year’s adventures, why not take a little time to check in on your finances? Think of it as decluttering your money matters—just like you’d tackle a messy closet or overflowing toy bin. With this end-of-year financial checklist, you’ll wrap up 2024 feeling organized and ready to take on whatever 2025 brings.
Review Your Budget
The end of the year is a great time to give your budget a check-up. It’s a chance to reflect on how well your money worked for you and to identify opportunities for improvement. Start by looking at the big picture:
- Where Did Your Money Go? Take a look at your spending categories for the year. Were there any surprises? Maybe groceries cost more than expected (hello, inflation!) or your kids’ extracurricular activities were a bit more costly than planned. Recognizing these patterns helps you prepare for similar expenses in the future.
- Were You Able to Save? If saving felt like a struggle this year, now’s the time to adjust. Look for areas where you might be able to cut back, like eating out or subscription services you rarely use. Even a small reallocation can free up funds for your emergency savings or that dream family vacation.
- Did You Stick to Your Goals? Revisit the financial goals you set at the beginning of the year. Maybe you wanted to pay down debt, save for a house, or build your emergency fund. How did you do? Celebrate the wins, no matter how small, and take note of areas where you may have fallen short.
Once you’ve assessed your current budget, it’s time to plan for next year. Consider upcoming expenses, like summer camp for the kids or home repairs, and factor those into your monthly spending. Also, think about new financial goals you want to set—whether it’s building a holiday fund to avoid credit card debt next December or saving for a big purchase.
Check In With Your Debt
Debt can feel like a heavy weight, but taking time to review it at the end of the year is a step toward lightening the load.
- Get The Full Picture – Start by gathering information about all your debts. This includes credit cards, student loans, car loans, and any other balances you’re carrying. Write down the interest rates, minimum monthly payments, and outstanding balances for each. Having a clear snapshot of your debt helps you see where your money is going and what’s costing you the most.
- Prioritize High-Interest Debt – High-interest debts, like credit card balances, can quickly spiral out of control. If possible, focus on paying down these first. Even a small extra payment can make a big difference over time, saving you money on interest and shortening the repayment period.
- Look Into Consolidation or Refinancing Options – If you have multiple debts, consider whether consolidating them into one loan with a lower interest rate could help. Refinancing options, especially for student loans or car loans, might also save you money. Just make sure to read the fine print and weigh the long-term benefits.
- Set Realistic Goals – Paying off debt can feel daunting, so break it down into manageable steps. Maybe you commit to paying an extra $50 toward your credit card each month or aim to pay off a smaller balance completely within the next three months. Celebrate these milestones—they add up!
Review Your Credit Score
Your credit score is one of the most important numbers in your financial life, and the end of the year is the perfect time to give it a little attention. A healthy credit score can open doors to better interest rates, loan approvals, and even lower insurance premiums, so it’s worth keeping tabs on.
Start by pulling your credit report from all three major bureaus—Equifax, Experian, and TransUnion. You’re entitled to a free report from each one annually. Look for errors like incorrect balances, accounts you don’t recognize, or late payments that shouldn’t be there. Disputing errors is easier than you might think and can quickly improve your score.
If you have credit cards with small unpaid balances, consider paying them off before the year ends. Keeping your credit utilization ratio (the percentage of your credit limit you’re using) low is one of the fastest ways to boost your score. Ideally, aim to use less than 30% of your available credit.
If your credit needs some work, set a goal for the upcoming year. Maybe it’s paying off a certain amount of debt, increasing your credit limit, or just staying consistent with on-time payments. Small, steady improvements can add up to a big difference over time.
Invest What You Can Into Retirement
Investing in retirement now can have a big impact on your future. Plus, making contributions at the end of the year can help you save some money during tax time.
Take a look at how much you’ve contributed to your retirement accounts this year. Are you on track to max out contributions, or is there room to add more? For 2024, the contribution limit for a 401(k) is $23,000 (or $30,500 if you’re 50 or older). For IRAs, the limit is $7,000 (or $8,000 if you’re 50 or older). Even if you can’t max it out, contributing whatever you can before the year ends can still make a difference.
If you struggled to save for retirement this year, set yourself up for success in 2025 by automating your contributions. Even small, regular deposits add up over time. Start with what you can comfortably afford and increase the amount when you’re able.
Check Your FSA Accounts
If you have a Flexible Spending Account (FSA), now’s the time to give it a little attention. One of the most important things to check is your FSA balance. Many FSAs have a “use it or lose it” policy, meaning any unspent funds don’t roll over into the next year. Some plans offer a grace period or allow you to carry over a small amount, but it’s best to double-check the rules for your account. If you still have money to spend, now’s the time to put it to good use.
Not sure what to spend your FSA funds on? There are plenty of eligible expenses, including:
- New glasses or contact lenses
- Dental work or cleanings
- Over-the-counter medications
- First-aid supplies
- Therapy or counseling sessions
Use Your Insurance Benefits
The end of the year is a great time to take full advantage of the benefits your insurance plan offers—before they reset in January. Whether it’s health, dental, or vision insurance, ensuring you’ve used what you’re entitled to can save you money and keep you on top of your wellness needs.
If you haven’t already, book those yearly checkups for yourself and your family. Many insurance plans cover preventive services like physicals, vaccinations, and well-woman exams at no cost to you. These appointments not only help catch potential health issues early but also ensure you’re getting the most out of your coverage.
Consider Your Insurance Coverage
Insurance might not be the most exciting part of your financial checklist, but it’s one of the most important. The end of the year is the perfect time to review your policies, ensure you’re adequately covered, and look for opportunities to save money.
When was the last time you compared car insurance rates? If it’s been a while, you might be paying more than you need to. Insurance companies often change their rates, and switching providers could save you hundreds of dollars a year. Use an online comparison tool to scope out better pricing, and don’t forget to ask about discounts for bundling policies, being a safe driver, or having a good credit score.
If you don’t already have a life insurance policy, now’s a great time to get one. Life insurance is especially important for moms—it ensures your family is financially protected if the unexpected happens. If the process seems daunting, consider a no-exam policy. These are faster and easier to secure, making them a great option for busy moms who want coverage without the hassle.
Use Extra Money to Get Ahead
If you find yourself with a little extra cash at the end of the year—whether it’s from a holiday bonus, a side hustle, or simply saving more than expected—it’s a golden opportunity to get ahead financially. Instead of letting that money disappear into day-to-day expenses, consider using it to set yourself up for success in the year ahead.
If you’re caught up on debt but still feel the pinch of monthly bills, consider using extra funds to prepay a few expenses. Covering your car insurance or utility bills a month or two in advance can free up room in your budget for other priorities and reduce financial stress.
Taking time to review your finances now can save you from headaches and stress down the road. Whether you’ve checked off every item on this list or just a few, each step brings you closer to your financial goals. So, take a moment to celebrate what you’ve accomplished this year—because every little bit counts. Here’s to a prosperous and worry-free new year ahead!