Put these 6 things on your year-end financial checklist right now

5 min read
1

We know. It’s the holiday season and it can feel dizzying. You’re busy buying gifts, booking travel tickets, whipping up recipes and readying your place for stay-over guests who expect clean towels.

It probably sounds like a horrible time to take on more tasks. Yet, if you start checking in with your financial situation now-ish, you could help make sure you aren’t putting your financial goals more out of reach.

“Rather than look at it as ‘there is only so much time before the deadline and I’m not going to accomplish my goal anyway,’ I’d rather people think about it as ‘I have a head start,” says Lauren Anastasio, CFP at SoFi, a personal finance company.

Everyone’s situation is different and financial complexities are inevitable. But here are six important tasks you might want to consider squeezing in before 2019 comes to a close, per the experts.

1. Make sure your holiday spending estimates are brutally honest 

Soon enough, if not already, you might declare this and that financial resolution. But in December, there is the added risk of digging yourself into a deeper financial hole from all of that holiday spending. So, try to get ahead of that particular red flag by doing the math of what will cost you what — and be brutally honest.

For example, it’s all too easy to think ‘I’ll spend $400 on gifts’ and assume that is all the extra spending you will do. In reality, it’s probably not. Also account for expenses, like the new towels you’ll buy for guests or the extra food you’ll spend on a big family meal. Once you have that number, budget accordingly.

[READ: Survey: Holidays bring spending stress for most Americans]

2. Meet time-sensitive financial deadlines

The clock is ticking to make sure you don’t leave money on the table before the year ends.

Now is the time to contribute the maximum amount to your 401(k), if you have one and have the funds to do so. You will need to make all of your contributions to it by December 31.

If you’re under 50, you can contribute up to $19,000 in 2019. If you are 50 or older, you can contribute another $6,000. The perks of pre-tax contributions coming from your paycheck are reducing your taxable income, and at the same time, forcing you to save.

It could also be a good time to decide whether to reallocate the assets in your 401(k) (if applicable), as well as to reexamine who you listed as your beneficiary.

“Maybe you had a child or got married or divorced,” says Luis F. Rosa, CFP, founder of Build a Better Financial Future and host of the On My Way to Wealth podcast. “You want to check your beneficiaries because you may want to add somebody or  delete somebody.”

[READ: Here’s the average 401(k) balance by age and how to raise yours]

3. Take advantage of tax breaks

Don’t overlook potential tax breaks in 2019.

You may have an opportunity to save money on taxes if you deploy a strategy or two before the end of 2019. If you expect a year-end bonus from your employer, you may want to see if you can defer the extra money into next year (if it would put you into another tax bracket, for example). By doing so, you won’t have to pay taxes on the bonus in 2019.

If you have an accountant, check in with them for advice on how to lower your tax bite — especially if you ended up paying more than you thought or got less of a tax return than expected last year.

“Now is the time to figure out if you are withholding enough taxes,” Rosa says.

[READ: 2018-2019 tax brackets]

4. Evaluate your finances

We know: it can feel painful and emotional to take stock of your finances. But looking at your financial accounts over the last 11 months will give you a baseline to decide what to do next.

While reviewing your finances, evaluate whether you achieved your 2019 financial goals — if you set them.

“Determine ‘How did I do? Am I on track?’” SoFi’s Anastasio says. “‘Did I completely forget about something that I had been working on in the spring and summer came along and I abandoned that goal or priorities were elsewhere?’”

If you didn’t save a certain amount or pay down a debt like you hoped to or something else, don’t dwell on defeat. Instead, learn from what happened or didn’t happen and try to make progress on the goals you still care about.

[READ: How low-income earners can overcome their circumstances and set financial goals]

5. Start dreaming about your next financial goal 

Now for the fun part: Get dreaming and set your financial goal or goals for next year.

Whatever your goal is (to increase savings, pay down debt or something else), write it down somewhere and choose a starting point to try to attain it. Spoiler alert: even this part is hard. So, don’t go wild here with goals. Focus on one objective and figure out how much you need by when.

Get specific with the costs, too. ‘I want to get a car this year’ isn’t enough. You will want to consider what kind of car, how much it will cost, including insurance and gas expenses.

[READ: 6 financial goals to achieve before you die]

6. Use mobile apps to quicken financial chores

You don’t have to spend too much time evaluating your personal finances; apps can do the work on your behalf.

You can plug your financial data into digital tools like Mint and Wally so that they help you understand your spending and savings across all of your accounts. Your bank may also offer similar functionality through its app and online banking. Large banks, like Citi, and small banks, like Mercantile Bank of Michigan, offer digital budgeting tools, for example.

Then, consider what financial areas you might want to automate so that the task gets done without requiring regular work from you. You won’t automate everything, especially if your income is irregular and your balance tends to dip low.

Consider settling on the areas of your finances that you can safely outsource. In so doing, you will avoid the inevitable inertia that comes with taking on a banking task, like paying down college debt more quickly or regularly saving money.

If you prefer to be more hands on with your money decisions, create a spreadsheet of your budget for the upcoming months, if not several years.

First item to put on your expense list? Your retirement savings — which will likely require a mindshift. “They’ll say ok, ‘What’s my income? What’s my expenses? What’s my going out money?’” says Chad Parks, founder and CEO of Ubiquity Retirement + Savings in San Francisco. “‘What do I have left over to save? Oops, there’s nothing.’” 

In creating a cash flow forecast, you will have a document at your fingertips to make more thoughtful financial decisions.

“It really does empower you to feel confident about the decisions you’re making because you know where you are at,” Parks says. “If you are over and under a month, you make an adjustment and ask yourself  ‘Am I OK with that or next month do I need to be a little more careful?  Maybe we should postpone that vacation or maybe I should get a side gig, because I really want to meet some goals.’”

Bottom line

At this time of year, expect a lot of opinions on what you ought to do with your money — including pressure from family members.

But only you know what you want. While pressure to overspend this holiday season is acute, consider what you really want to achieve and act accordingly. Perhaps that means making gifts instead of buying them. But prepare to be courageous — your verdict may very well go against the social norms of your circle at an emotionally charged time of year.

“Everyone has different ideas of what the holidays should be,” Amy Jo Lauber, CFP, president of Lauber Financial Planning. “Love and family and friendship and relationships and money, everything gets all tangled up at this time of this year. So, it’s hard to kind of keep your footing. … Come January, you don’t want to be completely blindsided and you don’t want to be full of regret. Regret is a very expensive emotion. I would want everyone to do things intentionally whatever they decide to do.”

Create a free Bankrate account to get expert advice, personalized lending offers and other resources tailored to your unique financial goals.

Learn more: