As 2024 draws to a close, it’s the perfect time to reflect on your financial progress and set the stage for a successful 2025. Here’s a checklist to help you make the most of the remaining days of the year and prepare for the new one:
- Use Your FSA Funds: Don’t let your Flexible Spending Account (FSA) dollars go to waste. Check your employer’s rules for deadlines and eligible expenses. You can use remaining funds for eyeglasses, contact lenses, and various over-the-counter healthcare products.
- Maximize Retirement Contributions: If possible, contribute the maximum amount to your retirement accounts. For 2025, the 401(k) contribution limit is $23,500, and the IRA limit is $7,000 (or $8,000 for those 50 and older). Remember, consistent contributions are key to long-term retirement success.
- Review Tax Withholdings: Ensure your tax withholdings are accurate, especially if you experienced any major life events in 2024. Use the IRS Tax Withholding Estimator to adjust your withholdings accordingly.
- Update Beneficiaries: Review and update the beneficiaries on your financial accounts, including bank accounts, retirement accounts, and insurance policies, to reflect any changes in your life circumstances.
- Reassess Your Budget: Take an honest look at your spending habits and make adjustments as needed. Consider using the 50/15/5 guideline to allocate your income effectively.
- Set New Financial Goals: Define specific, measurable, achievable, relevant, and time-bound (SMART) financial goals for 2025. Whether it’s paying off debt, increasing savings, or investing wisely, having clear goals will keep you motivated.
- Seek Professional Advice: If you need guidance or support in achieving your financial goals, consider consulting a financial advisor. Their expertise can provide valuable insights and help you make informed decisions.
By taking these steps before the year ends, you can set yourself up for financial success in 2025 and beyond.