The end of the year is a critical time to assess your financial health and prepare for the upcoming year. For many families, holiday spending, tax implications, and retirement planning can feel overwhelming. However, a simple checklist can make these tasks manageable and reduce financial stress. According to financial planner Connor Bauserman, here’s how to ensure a financially sound transition into the new year.
Assess Holiday Spending and Plan for Next Year
Many families overspend during the holidays due to aggressive promotions and impulse buying. The result? Debt or depleted savings. The key is planning ahead. Review December spending, pay down balances if possible, and start saving small amounts monthly. For example, if your family spends an average of $1,600 on the holidays, saving roughly $134 per month can prevent financial strain. This proactive approach transforms a potential debt burden into a manageable expense.
Automate Your Savings and Investments
Automation is one of the easiest ways to improve your financial habits. Setting up automatic transfers to high-yield savings accounts, brokerage accounts, or retirement plans ensures consistent saving without requiring active effort. This prioritizes long-term goals over short-term spending. By making saving a background process, you stay on track regardless of income fluctuations or daily distractions.
Maximize Your Tax Strategy
Waiting until tax season to think about taxes can result in missed opportunities. Families with taxable investment accounts should consider tax-loss harvesting, selling losing investments to offset gains and reduce tax liability. Additionally, maximizing HSA contributions and making strategic business purchases can further minimize tax burdens. Always consult a tax professional to ensure compliance and identify all eligible deductions.
Review and Increase Retirement Contributions
Increasing retirement contributions is a common New Year’s resolution, but it doesn’t have to wait. Review your 401(k), IRA, or Roth IRA accounts now and look for ways to increase contributions. Even small increases can significantly impact long-term growth, especially when combined with employer matches. Most contributions can be made before April 15 for the previous year, but some require calendar year-end action.
The end of the year is more than just a time for reflection; it’s a chance to solidify your financial future. By addressing spending, automating savings, optimizing taxes, and boosting retirement contributions, families can enter the new year with clarity and reduced stress.
