As the year comes to a close, it is essential to address your financial needs before the holiday rush begins and set yourself up for a successful 2025. Here are five steps to help you establish a solid financial foundation and enjoy a stress-free start to the new year.
1. Review Your Budget
Be strategic with your money management. Whether you do or do not already have a budget, it is important to reflect on your year and set specific financial goals for the new year. From there, create a detailed budget that tracks all your current and future expenses. You can establish detailed targets through developing S.M.A.R.T goals, which are which are specific, measurable, achievable, realistic and time-based, and finding a helpful budgeting tool. If you use SESLOC Online Banking, try the built-in Financial Tools. You can view and manage all your financial accounts in one site, including accounts at other banks or institutions.
When making your budget, make sure to prioritize your savings. It is not a matter of if, but more rather a matter of when unexpected life expenses will pop up. Plan ahead by putting away a certain amount (ideally 10% of your income) each month or pay period to an emergency fund.
2. Maximize Your Retirement Contributions
As you move into the new year, consider increasing your 401k contribution, especially if you are not maximizing your company’s matching program. No matter what your retirement savings goals are, at a minimum, you should plan to fully utilize your employer’s match. While many programs have a vesting period, in which the percentage of their contribution becomes “yours” over a period of time, the match is essentially free money for your retirement fund.
3. Check Your FSA Balance
A Flexible Spending Account (FSA) is a great benefit offered by many employers that allows you to save money by setting aside pre-tax dollars to pay for eligible medical expenses. However, FSA’s expire annually and are use it or lose it. Some plans expire on December 31, others give a grace period, and some allow a limited rollover to the next year.
If your plan has a grace period, it might be too late to get scheduled for a last-minute eye or dental exam, but you can use your funds to order contacts, get a new set of glasses, refill prescriptions, pick up an emergency first aid kit or stock up on sunscreen.
4. Start Prepping for Tax Season
Tax season will be here before you know it, so there are a few things you can plan to do now that will help make things a little less stressful.
- Locate and review last year’s tax return and use it as a guide to make a list of all the organizations that you’ll be expecting required documentation from.
- If you moved or got a new phone number or email address this year, make sure your contact information is up to date with all relevant organizations.
- Make a list of all the receipts you will need for your deductions, then collect and organize them.
- Go ahead and pencil in an appointment with your tax advisor or CPA. Their schedules can book up quickly during tax season. Plus, getting your taxes done as soon as possible can help prevent identity theft and tax fraud. Unfortunately, scammers take advantage of tax season time of year to file fraudulent returns to claim other people’s tax refunds.
5. Get Ahead of Your Debt
Review the outstanding balances and interest rates of your credit cards, loans and other debts. If you have any extra funds, reduce your balances and cut down on interest payments in the new year – starting with paying down high-interest debt. You can even explore the option of a Debt Management Program (DMP) which could potentially lower your monthly obligation and improve your credit score over time. There is no one-size-fits-all solution so chatting with a counselor from our non-profit partner GreenPath Financial Wellness can help you determine if a DMP is a good fit for your situation.
