On top of the very busy holiday season, the end of the year also comes with many deadlines for your finances. One way to make checking off your to-dos a little easier is to gather all of the financial data and information you need ahead of time, so you’re not left scrambling the last few days of December.
Year End Financial Data: Look into your Flexible Spending Account (FSA) balance
FSAs come with a “use it or lose it” rule, so anything you haven’t used up by the end of the year may not roll over to next year. A lot of rules changed during the pandemic, and some plans offer a grace period or allow you to roll over a portion of unused money in your FSA, so make sure you know the rules for your specific account.
Also, if you receive daycare reimbursement through your FSA, don’t forget to submit that information by the deadline. The deadline is March 31 for many plans, but again, you’ll want to look into your account information to make sure. Gather the documentation for the year now so you’re ready when the deadline comes up.
Have a tax organization system ready
You will likely start receiving your important tax documents in January, so now is a good time to figure out how you’ll keep track of them all. It can be especially tricky because some documents arrive in the mail, and others are delivered via email.
Try to set up both physical and electronic folders now so that as you come across pertinent documents, emails and receipts, you can file them away so they’re ready for tax time.
Review your retirement accounts
At the end of the year, it’s a good idea to look into your retirement accounts and see where you stand. That would include your 401(k), IRA and other investments that you’ve been contributing to throughout the year.
This accomplishes two things: First, it allows you to make any additional contributions if you’re able to before the end of the year. And second, it shows you how this past year went, and whether you need to make any changes to your contributions in the year ahead.
Review your budget, savings and credit
The cost of everyday living has gone up a lot over the past few years, and if you’re not careful, your spending can start to add up and impact your finances. Take the time now to review your spending habits over the past year, and consider where you might need to make changes.
This is also a prime opportunity to check in with your savings accounts. Is your emergency fund where you want it to be? And if not, is there anything you can do in the new year to improve it? Sometimes something as simple as setting up an automatic transfer on a monthly, biweekly or weekly basis can make a big difference in growing your emergency fund.
While you’re at it, you might also consider taking a look at your free annual credit report to make sure everything looks right. It’s smart to do this on an annual basis, so add it to your end of the year checklist if you have time. Check out my post about protecting yourself from fraud and identity theft for more information on what to look for.
Make a plan for the year ahead
Once you’ve gathered information on the past year, you’ll be more prepared to make an informed plan for the next year. A lot of times, just setting aside time to sit down and review everything can be the biggest hurdle for people. So before the end of the year, try to mark some time on your calendar to gather the numbers and consider your biggest goals for the year ahead.
If you need more help, here are some of my previous posts about setting goals and prepping for the new year:
About Your Richest Life
At Your Richest Life, physician-focused financial planner Katie Brewer, CFP®, wants to help you build a successful financial future. For more information on the services offered, contact Katie today.