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Your End-of-Year Financial Checklist

The holiday season will soon be upon us, and as your schedule fills with holiday parties and events, your wallet will inevitably start to feel like it’s shrinking. It doesn’t matter if you’ve budgeted for the holidays or not, the end of the year is a great time to take a good, hard look at your finances and start getting your stuff together for 2020.

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Whether you’re already up to snuff with every dollar arriving and leaving your bank account, or you’d prefer to squint your eyes as you pay your bills, you’ll never regret taking control of your finances – not only because you’ll feel more in control but because this time of year is especially crucial when you could be missing out on some serious end-of-year savings and tax breaks.

That’s why we reached out to a handful of financial experts – these guys know their way around a checkbook and a tax form and aren’t shying away from dispensing some serious financial knowledge. If you’re ready to take control of your finances and prepare yourself for a prosperous new year, take a look at these expert-approved tips.

Maximize Employer 401(k) Match Opportunities

“If your employer offers a 401(k) match, whenever possible, everyone should find out what the limit is, then contribute at least the amount required to get the maximum match. The result is that you will have free pre-tax employer contributions at the end of the year. If you haven’t been contributing to your 401(k) plan at work at a level that gets you the maximum employer match, check on whether there may be a ‘catch up’ opportunity before year-end. Leaving this benefit underutilized is the same as leaving money on the table,” says David Desmarais, CPA/PFS member of the AICPA PFP Executive Committee.

If You Go Green, Don’t Forget to Save Green

“Taxpayers who upgraded their homes to make use of solar or certain other renewable energy in 2019 may be eligible for a tax credit of 30 percent to offset some of the costs. For those who are into renewable energy but haven’t had the work done yet, it may be too late to book an installer for 2019. Be aware that the solar credit reduces from 30 percent to 26 percent from 2019 to 2020. Though less, 26 percent is still a good rate. If you are going to miss the 2019 deadline, act now and reduce your 2020 taxes!” suggests Mackey McNeill, CPA/PFS member of the AICPA Consumer Financial Education Advocates

Take Advantage Of Your Home Business or Side Hustle

“Many taxpayers have side gigs these days and can expect to pay both income and self-employment tax on those net profits in April. So, if you have expenses related to your business that need to be paid, do it before year-end to offset any current taxable income. Driving for a rideshare company and been eyeing some slick seat covers or gadgets? Now is the time to invest,” says Cari Weston, CPA, CGMA Director of Tax Practice & Ethics at the AICPA

Get Life Insurance

“If you’re a dad, I strongly suggest finally doing your will and getting term life insurance,” says Wesley Botto, partner at Cornerstone Financial Group. “If there isn’t a will to decide who should take care of your kids if both you and your partner pass, then a judge will make the decision. Getting estate planning documents does not have to take a long time; it’s just one of those things that is low-urgency, high-priority.”

Sit down and Create a "Financial Report Card"

During this time, you can assess your current financial situation and review the past year – and if you weren’t already planning on doing this, it’s crucial that you do. Facing your finances, no matter how tough it is, will always make you feel better. “Did you accomplish your financial goals? Did you pay down the debt you wanted to pay down? Use this as a way to review your financial year,” suggests Jordan Tarver, Senior Financial Analyst at FitSmallBusiness.com.

Go on a Debt Diet

“It's time to make goals to get rid of your debt completely and one of the best times to be debt-free is at the beginning of the year,” says Tarver. “Evaluate your debt obligations and make a plan to shed it as quickly as possible.”

Check Your Credit Report and Score

Far too many people are averse to checking their credit score in fear of what it might say … but it’s not that bad, we promise! “Checking your credit report can help you identify any misreported information and get those marks removed before the new year,” explains Tarver. “This can help increase your credit score and better prepare you for future credit applications.”

Check In On Your Emergency Fund

“If you don’t already have a healthy emergency fund, start working toward one as soon as possible,” says Sean Messier, Credit Industry Analyst. “In case of emergency, you should have a savings account containing enough cash to cover at least three months of essential expenses, like housing, food and transportation. Don’t dip into your emergency fund if you don’t absolutely have to!” To maximize your emergency savings, think about using an online savings account, where you’ll likely find the best interest rates. You may want to set up direct deposit for your emergency account, so you can build a financial safety net without putting much thought into it.

Evaluate Your Personal Cash Flow

Have you ever noticed how easy it is to spend side income like it’s Monopoly money? Now’s the time to take a look at that extra income you’ve been spending without thinking and really get your money’s worth. “Have you received a raise, or added another source of income? Think about how you can get this extra money to work for you through investments and savings accounts,” suggests Messier.

Make a Plan and Stick With It!

If after checking your finances, you've realized they’re not where you’d like them to be, formulate a plan to bolster your credit scores so you can get better rates on loans and other credit in the future. “The best ways to increase your credit scores include ensuring all payments are made on time and maintaining low credit card balances,” says Messier. “For best results, you may want to pay off your credit card balances in full each month, which will not only be good for your credit, but will also help you avoid interest.”

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Kaitlyn McInnis, Khareem Sudlow