End of Year Financial Planning: Your No-Nonsense Guide to Finishing Strong

Here’s the thing: end of year financial planning isn’t about becoming some finance guru who speaks fluent spreadsheet. It’s about taking a breath, looking at what actually happened with your money this year, and setting yourself up so next December doesn’t feel like a financial crime scene. And honestly? Once you get past the initial dread — kind of like jumping into a cold pool — it can actually be satisfying. Weird, I know.

Why December Is Your Financial Sweet Spot (No, Really)

There’s something almost magical about the end of the year — and I’m not talking about holiday lights or those New Year’s resolutions that die a quiet death by January 15th. (RIP to my 2023 resolution to “finally get organized.” We hardly knew ye.)

I’m talking about the very real, very practical window of opportunity you have to make moves that can seriously impact your financial situation. It’s like the universe gives you this little gift: a chance to fix things before the clock runs out.

According to research from the Financial Planning Association, nearly 60% of Americans don’t review their finances until they’re forced to — usually when something breaks, someone gets sick, or tax season arrives like an unwelcome relative who stays too long. But here’s what I’ve learned after years of doing this both terribly and less terribly: the people who do end of year financial planning consistently report feeling more in control and less stressed about money. Shocking, right?

The end of the year gives you a unique advantage. Tax deadlines are approaching, which means certain moves can still count for this year’s returns. Your employer benefits might have use-it-or-lose-it provisions. Investment opportunities exist that won’t be there in January. It’s like the financial equivalent of that moment in a video game when all the power-ups appear at once — you’d be silly not to grab them.

Taking Stock: Where Did Your Money Actually Go? (Brace Yourself)

Before you can plan where you’re going, you need to figure out where you’ve been. I know, I know — this sounds about as fun as watching paint dry in slow motion while someone reads the dictionary to you. But stick with me, because this part is actually kind of fascinating in a horrifying way.

Grab your bank statements from the past year. Yes, all of them. Pour yourself something strong (coffee, wine, whatever gets you through). And prepare to meet yourself.

If you’re like most people, you’ll discover some fascinating things. Like that streaming service you forgot you were paying for. The one you signed up for to watch that one show, watched exactly three episodes, and then… forgot existed. Or the fact that you spent $847 on coffee this year.

No judgment here — I once sat down and calculated I’d spent enough on takeout to fund a small vacation. To like, an actual nice place. It was humbling. My partner just looked at me and said, “You know we have a kitchen, right?” Yeah. I know. But do I want to use it at 8 PM on a Tuesday? That’s the real question.

The goal here isn’t to shame yourself into financial submission. It’s to get real data. A study published in the Journal of Consumer Research found that people who track their spending for just 30 days reduce unnecessary expenses by an average of 15-20% without feeling deprived. Imagine what a full year’s review could reveal. (Spoiler: probably some things you’d rather not know, but need to.)

Look for patterns. When did you overspend? Was it stress? Boredom? That one friend who always suggests expensive restaurants and then acts surprised when the bill comes? Understanding your triggers is half the battle in end of year financial planning. The other half is actually doing something about them, but we’ll get there.

The Tax Moves You Can’t Afford to Ignore (Even Though You Want To)

Let’s talk taxes — everyone’s favorite topic, right up there with root canals and airport security lines. I can feel you wanting to skip this section already. Don’t. Because here’s the truth: smart end of year financial planning can literally save you thousands of dollars. Not “might save” or “could potentially save.” Actually save. Like, money that stays in your pocket instead of going to the IRS.

Maximize Your Retirement Contributions

If you haven’t maxed out your 401(k) or IRA contributions, December is your last chance. For 2024, you can contribute up to $23,000 to your 401(k) if you’re under 50, or $30,500 if you’re over 50. Traditional contributions reduce your taxable income right now, which means you pay less in taxes this year.

I’ll never forget the year I realized I could bump up my contribution for just the last two months and knock myself into a lower tax bracket. It felt like finding money in a coat pocket, except the coat was my own financial ignorance and the money was several hundred dollars I didn’t have to send to the IRS. My accountant looked at me like, “You didn’t know you could do this?” Nope. Sure didn’t. But I do now.

Harvest Your Investment Losses (Yes, Losing Can Help You Win)

This one sounds counterintuitive, but tax-loss harvesting is a legitimate strategy. If you have investments that have lost value — and let’s be honest, we all have a few of those sitting around like sad houseplants we forgot to water — you can sell them to offset gains you made elsewhere. You can deduct up to $3,000 in net losses against your ordinary income, and carry forward any excess losses to future years.

The key is doing this before December 31st. Come January 1st, that opportunity vanishes like your motivation to go to the gym. (See? Told you that resolution wouldn’t last.)

Don’t Forget Your FSA or HSA (Seriously, Don’t)

Flexible Spending Accounts are the ultimate use-it-or-lose-it situation. If you’ve got money sitting in your FSA, you typically need to spend it by year-end or it disappears into the void. Poof. Gone. Like it never existed.

Some plans offer a grace period or allow you to carry over a small amount, but don’t count on it. I learned this the hard way one year when I lost $400 because I forgot to check. Four hundred dollars! Do you know how many overpriced coffees that is? A lot. It’s a lot of coffees.

Health Savings Accounts are more forgiving — that money rolls over — but you still want to maximize contributions before the year ends if you can. For 2024, individuals can contribute up to $4,150, and families up to $8,300. These contributions are tax-deductible, and the money grows tax-free if used for qualified medical expenses. It’s basically a triple tax advantage, which in the world of finance is like finding a unicorn.

Charitable Giving: Doing Good While Doing Well (And Feeling Good About It)

Here’s where end of year financial planning gets to feel a little less mercenary and a little more human. If you’re charitably inclined anyway — and I hope you are, because the world needs it — being strategic about it can benefit both the causes you care about and your tax situation. It’s a rare win-win.

The standard deduction is pretty high these days — $14,600 for individuals and $29,200 for married couples filing jointly in 2024. This means many people don’t itemize deductions anymore. But if you’re close to that threshold, bunching your charitable contributions into one year can push you over, making itemizing worthwhile.

I’ve started doing this thing where I give every other year instead of annually. Sounds weird, I know. But it works. Instead of donating $2,000 each year, I donate $4,000 every other year. Same total giving over time, same causes getting supported, but in the years I donate, I can itemize and get the tax benefit. The charities don’t care when the money comes, and my tax bill definitely notices.

Another option? Donor-advised funds. You make a contribution this year, get the tax deduction now, and then distribute the money to charities over time. It’s like a charitable savings account, and it’s become increasingly popular for end of year financial planning. According to the National Philanthropic Trust, donor-advised funds have grown by over 300% in the past decade, partly because they offer this flexibility while still providing immediate tax benefits.

Plus, there’s something nice about being able to support causes you care about while also being smart about your finances. You don’t have to choose between being generous and being strategic.

Reviewing Your Insurance: The Boring Stuff That Actually Matters

Okay, I’m going to level with you — reviewing insurance policies ranks somewhere between “organizing the junk drawer” and “cleaning the gutters” on the excitement scale. Maybe even below both of those. But it’s crucial, and year-end is the perfect time to do it because you’re already in “let’s get our life together” mode.

Life Insurance Check-In

When’s the last time you looked at your life insurance coverage? If your answer involves the phrase “I think it was when…” then it’s been too long. Life changes — marriages, divorces, kids, new houses, aging parents who might need help — all affect how much coverage you need.

A general rule of thumb is to have coverage worth 10-12 times your annual income, but your specific situation might call for more or less. The point is to actually think about it rather than just letting that policy auto-renew year after year like a gym membership you never use.

Health Insurance Open Enrollment (Don’t Just Click “Keep Current”)

If you get insurance through your employer, open enrollment typically happens in the fall. This is your chance to adjust your coverage, add or remove dependents, or switch plans entirely. Don’t just click “keep current coverage” without thinking. I know it’s tempting. I know you’re busy. But don’t.

I made this mistake for three years running. Just clicked through, barely reading anything, because I had stuff to do and insurance is boring. Turns out, my company had added a high-deductible plan with an HSA option that would have saved me about $1,200 annually given my actual healthcare usage. That’s $3,600 I essentially threw away by not paying attention during end of year financial planning. I could’ve taken a really nice trip with that money. Instead, I paid extra for insurance I didn’t need. Cool. Cool cool cool.

Disability and Umbrella Policies (The Ones Nobody Thinks About)

Most people are underinsured when it comes to disability coverage. If you couldn’t work for six months, would you be okay financially? If the answer makes you uncomfortable — or if you just laughed bitterly — it’s worth exploring disability insurance.

Umbrella policies are another often-overlooked piece. For a relatively small premium (often $200-400 annually), you can get an extra million dollars in liability coverage. If you have any assets worth protecting, it’s worth considering. Because we live in a litigious society, and weird stuff happens.

Setting Up Your Financial Infrastructure for Next Year (Future You Will Thank You)

Here’s where end of year financial planning shifts from looking backward to looking forward. You’ve assessed where you are — probably with some wincing and maybe a little crying — now let’s build systems that make next year easier.

Automate Everything You Can (Because You’re Human and Humans Forget)

I used to think I’d remember to transfer money to savings each month. I was adorably optimistic. Like a golden retriever who thinks every car ride is going to the park. Then I automated it, and suddenly I was actually saving money. Revolutionary, I know.

Set up automatic transfers to savings accounts, investment accounts, and retirement funds. Schedule automatic bill payments. The less you have to think about, the less you can mess up. According to behavioral economics research from Duke University, people who automate their savings save 2-3 times more than those who rely on manual transfers. Because manual transfers require you to remember, and also to not spend that money on something else first. And let’s be honest — we’re all one “treat yourself” moment away from spending it.

Create a Realistic Budget (Finally) (For Real This Time)

Notice I said “realistic.” Not “aspirational fantasy budget where you never eat out and somehow spend $50 monthly on groceries while also meal-prepping like a Pinterest influencer.” A budget that actually reflects how you live, with room for the occasional splurge because you’re a human being, not a spreadsheet.

Use your spending review from earlier to inform this. If you spent $300 monthly on dining out this year, don’t budget $50 for next year unless you’re planning some major lifestyle changes. Budget $250, challenge yourself to stick to it, and celebrate when you do. Small wins count.

The 50/30/20 rule is a decent starting point: 50% of income to needs, 30% to wants, 20% to savings and debt repayment. Adjust based on your situation, but having a framework helps. Otherwise you’re just guessing, and guessing is how we ended up spending $847 on coffee.

Set Specific Financial Goals (Not Vague Wishes)

“Save more money” is not a goal. It’s a vague wish that will die alongside your gym membership by February. We’ve all been there. “Save $5,000 for an emergency fund by June 30th” is a goal. It’s specific, measurable, and time-bound. You can track it. You can celebrate milestones. You can actually achieve it.

Write down 3-5 financial goals for next year. Make them concrete. Maybe it’s paying off a credit card. Maybe it’s saving for a down payment. Maybe it’s finally starting that side business you’ve been talking about for three years. Whatever it is, write it down and break it into monthly or quarterly milestones.

Research from Dominican University found that people who write down their goals are 42% more likely to achieve them than those who just think about them. Forty-two percent! That’s not a rounding error — that’s a game-changer. So grab a pen. Or open a note on your phone. Whatever works. Just write them down.

Debt Strategy: Facing the Music (And Maybe Crying a Little)

Let’s talk about the elephant in the room — or more accurately, the debt on your credit card statement that you’ve been avoiding looking at. End of year financial planning means getting honest about what you owe and making a plan to deal with it. Not someday. Not when you feel like it. Now.

The average American household carries about $6,270 in credit card debt, according to recent data from the Federal Reserve. If that’s you, you’re not alone. You’re actually pretty normal. But you also don’t have to stay there, and that’s the important part.

The Avalanche vs. Snowball Debate (Choose Your Fighter)

There are two main approaches to paying off debt. The avalanche method focuses on highest interest rates first — mathematically optimal, makes total sense on paper. The snowball method focuses on smallest balances first — psychologically satisfying, makes total sense in your heart.

I’m team snowball, personally. Yes, you might pay slightly more in interest over time. But there’s something powerful about completely eliminating a debt, even a small one. It builds momentum. It makes you feel like you’re actually getting somewhere instead of just throwing money into a void. Dave Ramsey has built an empire on this approach, and there’s a reason it works for so many people. Sometimes psychology beats math.

That said, if you’ve got a credit card charging 24% interest, maybe tackle that one first regardless of balance. Some situations call for math over psychology. Use your judgment. You’re allowed to have judgment.

Consider a Balance Transfer (But Be Smart About It)

If you’ve got good credit, a balance transfer to a 0% APR card can give you breathing room to pay down debt without accumulating more interest. Just watch out for transfer fees (typically 3-5%) and make sure you can pay it off before the promotional period ends. Otherwise you’re just kicking the can down the road.

I did this once and it was genuinely helpful. Gave me 18 months to pay off a chunk of debt without interest piling on. But I also know someone who did it, felt relieved, and then ran up the original card again. Now they had two cards with balances. Don’t be that person. If you transfer a balance, close or freeze the old card. Hide it. Give it to a trusted friend. Whatever it takes.

Investment Check-Up: Beyond Just Checking the Balance and Panicking

If you have investments — whether in a 401(k), IRA, or taxable brokerage account — year-end is a good time to review them. Not to panic about market fluctuations or try to time the market (spoiler: you can’t, and anyone who says they can is lying), but to make sure your allocation still makes sense for where you are in life.

Rebalancing Your Portfolio (Sounds Fancy, Isn’t That Hard)

Over time, your investment mix shifts. If stocks had a great year, you might now have more stock exposure than you intended. If bonds did well, maybe you’re too conservative now. Rebalancing means selling some of what’s grown and buying more of what hasn’t to get back to your target allocation.

Most experts recommend rebalancing annually or when your allocation drifts more than 5% from your target. This forces you to “buy low and sell high” in a systematic way, which is exactly what you should be doing but feels counterintuitive in the moment. Our brains want to buy more of what’s doing well and avoid what’s struggling. Rebalancing makes you do the opposite, which is usually the right move.

Review Your Asset Allocation (Are You Taking the Right Amount of Risk?)

Your asset allocation should reflect your age, risk tolerance, and time horizon. The old rule of thumb was to subtract your age from 100 to get your stock percentage (so a 30-year-old would have 70% stocks). These days, with people living longer, some suggest subtracting from 110 or even 120.

The point isn’t to follow a formula blindly, but to make sure you’re not taking on more risk than you can stomach or being so conservative that inflation eats your returns. If you’re 30 and have 90% bonds, you’re probably being too cautious. If you’re 65 and have 95% stocks, you might want to dial it back a bit.

Don’t Forget About Fees (The Silent Wealth Killer)

Investment fees are like termites — small, easy to ignore, and quietly destroying your financial house while you sleep. A 1% annual fee might not sound like much. It’s just one percent, right? But over 30 years, it can cost you hundreds of thousands of dollars in lost returns. Not exaggerating. Actually hundreds of thousands.

Review what you’re paying in expense ratios, management fees, and advisory fees. If you’re paying more than 0.5% for a basic index fund, you’re probably overpaying. End of year financial planning includes making sure your money is working for you, not just for your fund manager’s boat payment. (They probably have a nice boat. Don’t fund their second one.)

Emergency Fund: Your Financial Safety Net (AKA Your “Oh Crap” Fund)

If 2020 taught us anything — and honestly, it should’ve taught us a lot — it’s that unexpected things happen. Pandemics. Job losses. Cars that break down at the worst possible time. Water heaters that decide to flood your basement. Life is full of surprises, and not all of them are good.

If you don’t have an emergency fund, building one should be priority number one in your end of year financial planning. Not priority two or three. Priority one.

The standard advice is 3-6 months of expenses. If you’re self-employed or have an unstable income, aim for 6-12 months. If you have a stable job and good insurance, maybe 3 months is fine. Adjust based on your situation and your anxiety level. (I’m a worrier, so I lean toward more. You might be different.)

I know that sounds like a lot. When I first started, I had maybe $200 in savings. The idea of saving $15,000 felt impossible. Like, laughably impossible. So I didn’t think about $15,000. I thought about $1,000. Then $2,000. Small wins build momentum. You don’t have to do it all at once.

Keep this money somewhere accessible but not too accessible. A high-yield savings account is perfect — you can get to it quickly in an emergency, but it’s not so convenient that you’ll dip into it for non-emergencies. And no, a new TV is not an emergency, no matter how good the Black Friday deal is. I don’t care if it’s 70% off. Not an emergency.

Estate Planning: The Thing Nobody Wants to Think About (But Everyone Needs)

I’m going to say something that might make you uncomfortable: you need a will. Yes, you. Even if you’re young. Even if you don’t have kids. Even if you don’t think you have enough assets to worry about. Even if thinking about your own mortality makes you want to crawl under a blanket and pretend this conversation isn’t happening.

Without a will, the state decides what happens to your stuff and who takes care of your kids if you have them. The state doesn’t know that you’d want your sister to have your grandmother’s ring or that your best friend would be a better guardian for your kids than your brother. (Love him, but he can barely take care of his houseplants.)

Basic Estate Planning Documents (The Bare Minimum)

At minimum, you need:

• A will
• A healthcare power of attorney
• A financial power of attorney
• Beneficiary designations on all accounts

You can do basic versions of these online for a few hundred dollars. If your situation is complex — multiple marriages, significant assets, business ownership, complicated family dynamics — spring for an estate planning attorney. It’s worth it.

I put this off for years because it felt morbid. Like, if I made a will, I was somehow inviting bad things to happen. (I know. Not logical. But feelings aren’t logical.) Then I had a kid and suddenly the idea of not having these documents felt irresponsible. It took one afternoon and cost less than a nice dinner out. Best money I’ve spent on end of year financial planning, hands down.

Review Your Beneficiaries (Seriously, When’s the Last Time You Checked?)

When’s the last time you checked the beneficiaries on your retirement accounts and life insurance? If you got married, divorced, had kids, or experienced any major life change, you need to update these. Like, right now. Put down this article and go check. I’ll wait.

Beneficiary designations override your will, which means if you never updated your 401(k) after your divorce, your ex-spouse might still get that money. I’ve heard horror stories about this, and they’re all preventable with 15 minutes of paperwork. Don’t let your life insurance go to someone you haven’t spoken to in five years because you forgot to update a form.

The Credit Score Check-In (Know Your Number)

Your credit score affects everything from loan interest rates to apartment applications to sometimes even job offers. It’s like your financial report card, except it actually matters after you graduate. Year-end is a good time to check where you stand and address any issues.

You’re entitled to a free credit report from each of the three major bureaus (Equifax, Experian, TransUnion) annually at AnnualCreditReport.com. Pull all three and review them for errors. According to a Federal Trade Commission study, one in five people has an error on at least one credit report, and one in 20 has an error serious enough to affect their credit score.

If you find errors, dispute them. It’s annoying, but it’s worth it. A friend of mine found a collections account that wasn’t hers — someone with a similar name, wrong social security number, whole thing was a mess. She disputed it, and her credit score jumped 40 points when it was removed. Forty points! That’s the difference between getting approved for a mortgage and not.

Planning for Big Expenses (Because They’re Coming Whether You’re Ready or Not)

Part of effective end of year financial planning is looking ahead at what’s coming. Do you know you’ll need a new car next year? Is there a wedding to pay for? A home renovation you’ve been putting off? A kid starting college? Life has a way of throwing expensive things at you, and the more you can anticipate them, the less they hurt.

Getting ahead of these expenses means you can save for them rather than financing them. Even if you can’t save the full amount, saving something reduces how much you’ll need to borrow and how much interest you’ll pay. Every little bit helps.

I like to keep a running list of “big things that will probably need replacing soon.” The water heater is 12 years old. The car has 150,000 miles. The roof is getting sketchy. None of these are emergencies yet, but they will be eventually. Murphy’s Law says they’ll all fail at the same time, probably during the holidays. By anticipating them, I can save gradually instead of scrambling when they fail and putting everything on a credit card.

The Mindset Shift That Changes Everything

Here’s what I’ve learned about end of year financial planning after years of doing it both badly and well: it’s not really about the money. I mean, yes, obviously it’s about money. But more fundamentally, it’s about control.

Financial stress isn’t just about not having enough money — it’s about feeling like money controls you instead of the other way around. It’s about lying awake at 3 AM wondering how you’ll pay for something. It’s about that knot in your stomach when you check your bank balance. It’s about feeling like you’re always one unexpected expense away from disaster.

When you do end of year financial planning, you’re taking back control. You’re making intentional decisions instead of just reacting to whatever happens. You’re being proactive instead of reactive. And that shift — from feeling like money happens to you to feeling like you’re directing your money — that’s huge.

A study from the American Psychological Association found that money is consistently the top source of stress for Americans, ahead of work, family, and health concerns. But the same research showed that people who engage in financial planning report significantly lower stress levels, even when their actual financial situation hasn’t changed much yet.

The planning itself — the act of looking at your situation honestly and making a plan — reduces anxiety. It’s like the difference between being lost in a strange city and being in a strange city with a map. You might not be home yet, but at least you know where you’re going. You have a direction. That matters more than you’d think.

Your End of Year Financial Planning Checklist (Actually Use This)

Let’s bring this all together with a practical checklist you can actually use. Print this out, stick it on your fridge, text it to yourself, whatever works. Just don’t let it disappear into the void of good intentions.

By December 15th:

• Review all bank and credit card statements from the year (yes, all of them)
• Calculate total income and expenses (prepare for surprises)
• Check FSA balance and spend if needed (don’t lose that money!)
• Review and adjust retirement contributions
• Assess investment portfolio and rebalance if necessary
• Review insurance policies for needed changes

By December 22nd:

• Make charitable contributions if planned
• Harvest investment losses if applicable
• Max out retirement contributions if possible
• Pay any deductible medical expenses if beneficial
• Update beneficiaries on all accounts (seriously, do this)
• Pull and review credit reports

By December 31st:

• Finalize any tax-advantaged moves
• Set up automatic transfers for next year
• Write down specific financial goals for next year
• Schedule a Q1 check-in with yourself
• Celebrate that you actually did this (you deserve it)

The Bottom Line on End of Year Financial Planning

End of year financial planning doesn’t have to be perfect. It doesn’t have to be complicated. It just has to be done. Start with one thing from this article — just one. Maybe it’s finally setting up that automatic savings transfer. Maybe it’s checking your FSA balance. Maybe it’s just pulling your credit report. Pick the easiest thing and do it today.

Trust me on this one.