December 23, 2024

Year-End Financial Checklist: How to Close Out 2024 on a High Note 

As the year draws to a close, it’s the perfect time to review your finances and ensure you’re on track to finish strong. Whether you’re looking to maximize your tax savings, get ahead on next year’s goals, or simply close out 2024 with financial clarity, a little planning can go a long way. Citizens First Bank is here to help with this comprehensive year-end financial checklist that will guide you through the final months of the year, set you up for success in 2025, and make sure you end the year on a high note. 

Review and Update Your Budget to Track Finances 

The end of the year is a great time to review your budget and reflect on your spending habits over the past 12 months. Look at your income, expenses, and savings to assess how well you stuck to your financial plan. 

• Track Expenses: Compare your spending to the budget you set earlier in the year. Are there areas where you overspent? Are there categories where you saved more than expected? This will help you identify areas for improvement. 

• Adjust for Holiday Spending: The holiday season often brings added expenses, from gifts to travel. Adjust your budget to account for any upcoming costs. Set aside funds for holiday shopping and celebrations to avoid last-minute stress. 

• Prepare Your Finances for 2025: Make adjustments to your 2025 budget by factoring in any changes in income, expenses, or financial goals. Setting a clear budget for the new year will help you start 2025 with a solid financial foundation. 

Maximize Retirement Contributions 

One of the smartest year-end moves you can make is contributing to your retirement savings. 

• 401(k) or 403(b) Contributions: If you have an employer-sponsored retirement plan, check to see if you’ve contributed enough to take advantage of any employer match. Consider contributing the maximum allowable amount for 2024 to boost your retirement savings. 

• IRA Contributions: If you haven’t already contributed to an Individual Retirement Account (IRA), now is the time. You can contribute up to $6,500 ($7,500 if you’re age 50 or older) for 2024, and contributions may be tax-deductible. Keep in mind that IRA contributions for 2024 must be made by April 15, 2025, but making them before year-end may help reduce your taxable income for the current year. 

Make Charitable Donations 

The end of the year is also an excellent time to consider charitable donations. Giving to causes you care about can provide a sense of fulfillment, and it may also offer financial benefits when tax time comes. 

• Maximize Tax Deductions: Charitable donations are tax-deductible, so making a donation before the year ends can help reduce your taxable income for 2024. Be sure to keep records of your donations, whether monetary or in-kind, for tax reporting purposes. 

• Donate Appreciated Assets: If you have stocks, bonds, or other appreciated assets, consider donating them directly to a charity. Not only can you potentially avoid capital gains taxes, but the charity will receive the full value of the asset. 

• Qualified Charitable Distributions (QCDs): If you’re 70½ or older and have a traditional IRA, you can make a QCD directly to a charity, which counts toward your required minimum distribution (RMD) and is excluded from your taxable income. 

Review Your Insurance Coverage 

As the year ends, it’s essential to review your insurance coverage to ensure you have the right protection in place for yourself, your family, your assets, and your finances. 

• Health Insurance: Make sure you’re enrolled in the best plan for your needs, especially if your employer offers open enrollment. If you’re purchasing insurance through the marketplace, be mindful of the enrollment deadline. 

• Life and Auto Insurance: Check your life insurance policy to ensure the coverage amount still aligns with your needs. Review your auto insurance as well to see if any changes are necessary based on your current situation, such as adding a teen driver or updating your vehicle. 

• Homeowners or Renters Insurance: Review your coverage to make sure your home or rental property is adequately insured, especially if you’ve made significant upgrades or purchases throughout the year. 

Check Your Credit Report and Score 

The end of the year is an ideal time to review your credit report and score. Monitoring your credit can help you catch any discrepancies or fraudulent activity early, and ensure you’re in good financial shape as you enter the new year. 

• Get Your Credit Report: You’re entitled to one free credit report from each of the three major credit bureaus (Equifax, Experian, and TransUnion) every 12 months. Use this opportunity to review your report for errors and dispute any inaccuracies. 

• Monitor Your Credit Score: A good credit score can help you secure better interest rates on loans and credit cards. If your score isn’t where you want it to be, take steps to improve it before applying for credit in 2025. 

Prepare for Next Year’s Financial Goals 

Now that you’ve reviewed your 2024 finances, it’s time to start thinking about your financial goals for 2025. 

• Set Specific Goals: Do you want to save more for retirement? Pay off high-interest debt? Build an emergency fund? Set clear, measurable goals for the year ahead, and break them down into actionable steps. 

• Track Your Progress: Use tools like budgeting apps, financial planning software, or a simple spreadsheet to track your progress throughout the year. Regularly reviewing your goals will help you stay on track and make adjustments as needed. 

• Consider Working with a Financial Advisor: If you’re unsure how to structure your goals or need guidance on investments, a financial advisor can help you create a comprehensive plan that aligns with your long-term objectives. 

Take Advantage of Tax Strategies 

Before 2024 ends, make sure you’re taking advantage of any available tax strategies that could benefit you when it’s time to file your return. 

• Tax-Loss Harvesting: If you have investments that have declined in value, consider selling them to offset capital gains from other investments. 

• Flexible Spending Accounts (FSAs) and Health Savings Accounts (HSAs): If you have an FSA or HSA, use up the remaining funds before the end of the year, as these accounts often have a “use-it-or-lose-it” policy. 

By reviewing your budget, maximizing retirement contributions, making charitable donations, and setting goals for 2025, you can close out 2024 on a strong financial note and enter the new year with confidence. Citizens First Bank is here to help you every step of the way as you navigate your finances and make the most of the year-end. Contact us today to discuss your financial goals and how we can assist in achieving them. Here’s to a successful 2024 and an even brighter 2025! 

Citizens First Bank – Member FDIC

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