Smart Financial Moves to Make Before the End of 2024
As the year winds down, it’s the perfect time to take stock of your finances and set yourself up for success in the coming year. Making a few savvy financial decisions now can help you save money, reduce stress, and achieve your goals in 2025. Here are some smart moves to consider before the calendar flips to 2025:
1. Maximize Your Retirement Contributions
If you haven’t hit the annual contribution limit for your 401(k), IRA, or other retirement accounts, now’s the time to catch up. For 2024, the IRS allows you to contribute up to:
$23,000 to a 401(k) (plus an additional $7,500 if you’re 50 or older).
$7,000 to a traditional or Roth IRA (plus an extra $1,000 if you’re 50 or older).
Maximizing these contributions not only grows your retirement savings but can also reduce your taxable income.
2. Use Your FSA Dollars
If you have a Flexible Spending Account (FSA) for healthcare or dependent care expenses, remember that these funds often have a “use-it-or-lose-it” rule. Schedule doctor appointments, stock up on eligible health supplies, or invest in childcare services before the deadline.
3. Review Your Budget and Spending Habits
Take a close look at your spending patterns over the past year. Did you stay within your budget? Identify areas where you can cut back, and set realistic financial goals for 2025.
4. Make Charitable Contributions
Giving to a charity not only supports a cause you care about but also provides potential tax benefits. Ensure your donation is made before December 31 to deduct it from your 2024 taxes.
5. Pay Down Debt
High-interest debt, such as credit card balances, can erode your financial health. Use any year-end bonuses or extra income to reduce your balances. This will free up funds for savings and investments in 2025.
6. Assess Your Emergency Fund
Experts recommend having three to six months’ worth of expenses in an emergency fund. If you’ve dipped into your savings this year, prioritize replenishing it to prepare for unexpected expenses in the future.
7. Check Your Credit Report Regularly
Thanks to ongoing efforts to help consumers monitor their financial health, the three major credit bureaus—Equifax, Experian, and TransUnion—now allow free credit report access once a week. Take advantage of this opportunity to review your credit report regularly for inaccuracies, fraudulent activity, or areas for improvement. A healthy credit report can lead to better loan terms, lower interest rates, and improved financial flexibility in 2025.
8. Evaluate Your Investment Portfolio
The end of the year is an ideal time to review your investments. Consider rebalancing your portfolio to maintain your desired risk level or sell underperforming assets to offset gains (tax-loss harvesting).
9. Plan for Tax Season
Organize your financial documents, including W-2s, 1099s, receipts for deductible expenses, and records of charitable contributions. Consider consulting a tax professional to identify ways to minimize your tax liability.
10. Set Goals for 2025
Take time to reflect on your financial progress in 2024 and set actionable goals for 2025. Whether it’s saving for a major purchase, buying a home, or building wealth, having clear objectives will keep you focused.
By taking these steps, you can finish 2024 on a strong financial footing and head into 2025 with confidence. Need help getting started? Reach out to us—your trusted financial institution—for resources and tools to guide your journey.
Here’s to a prosperous new year! 🎉