A Year-End Financial Check-In Before the Holidays Arrive
Early November is a great time year to look over your finances, even though it rarely feels that way. The holiday calendar hasn't filled up yet, and there is still enough time left in the year to make a few thoughtful changes.
Once Thanksgiving comes and the holiday gatherings begin, most of us have very little room left for paperwork. That's why we encourage the families we work with to set aside an hour or two in early November, while things are calmer, to look back at the year and get ready for the next one. You don't need to finish everything in one sitting, and you don't need to spend a huge amount of time. Here are six steps we suggest working through before the year closes.
Look Back at the Year as a Whole
Start with a simple look at how the year went. Pull up your bank and credit card statements and notice where your money went and then compare that picture to what you planned back in January. Some months will look better than others, and that is completely normal. The goal isn't to grade yourself. It's to notice what worked well so you can do more of it, and to spot the places where spending drifted so you can adjust your plan for next year.
If you saved more than you expected or paid down a balance you'd been carrying for a while, take a moment to recognize that progress. Steady effort over many years is what moves a plan forward, and it's worth celebrating along the way.
Revisit Your Retirement Savings Before the Year Ends
Many retirement accounts follow the calendar year, so this is a good time to check how much you've put into your workplace plan and any individual retirement accounts you hold. Workplace plans generally close for the year on December 31, while some individual accounts allow contributions for a given year up until the tax filing deadline the following spring.
If you have a little room in your budget, even a small increase in what you set aside from each paycheck can make a meaningful difference over time. The yearly limits on these accounts change from one year to the next, so it's worth confirming the current limits with your advisor or tax professional before you make a change.
Check on Required Withdrawals If They Apply to You
Once you reach a certain age, the rules for many retirement accounts require you to begin taking money out each year. These are called required minimum distributions, and they usually need to be taken by the end of the calendar year, although the very first one can follow a slightly different timeline. Missing one can lead to a penalty, so if this applies to you or to a parent you help with finances, it's worth confirming that this year's withdrawal has been taken or scheduled.
For those who are charitably minded and don't need the full withdrawal for living expenses, there may be ways to direct part of it to a charity. The rules here are specific, so this is a conversation to have with your advisor and tax professional before taking action.
Review Your Beneficiaries and Coverage
Life changes quickly. A marriage, a new grandchild, a move, or a loss in the family can all shift who you would want to receive your accounts and how much coverage your household needs.
Beneficiary forms on retirement accounts and life insurance policies generally take priority over what is written in a will, which is why it matters so much to keep them current. A few minutes spent confirming the names on these forms can save your family real confusion later. While you're at it, look over your home, auto, life, and disability coverage to make sure it still fits the life you're living today.
Gather What Your Tax Preparer Will Need
Tax season will be here soon enough. Starting a simple folder now, on paper or digitally, makes the spring tax preparation much easier. Keep receipts for charitable gifts alongside notes on any big changes from this year, like a new job or the sale of a home.
If your employer offers a flexible spending account for health or dependent care, check your balance as well, since many of these plans require the money to be used by a set deadline.
6. Set One or Two Intentions for Next Year
Once the practical steps are handled, take a step back and think about what you want for next year. Maybe it's building a stronger emergency fund or finally sitting down to talk through retirement plans with your spouse. Maybe it's wanting to feel more organized and less rushed whenever money comes up in conversation.
Choosing one or two meaningful goals tends to work far better than a list of lofty resolutions that are hard to keep. When a goal is tied to something you truly care about, like more time with family or a trip you've talked about for years, it becomes much easier to stick with it.
Finishing the Year with Steady Footing
A year-end check-in doesn't need to be complicated. It's a chance to take stock of where you are and step into the busyness of the holidays with one less thing on your mind. When you handle these steps in early November, you give yourself the gift of a calmer December and more time for the people and traditions that matter most to you.
If you'd like a partner to walk through this list with you, our team is always just a phone call away. You can learn more about how we work with families at riverbirchwm.com.
This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.
