8 money tasks to do before the end of the year

by Anna Baluch
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8 money tasks to do before the end of the year

The year (and decade) is coming to an end. To prepare for the new year ahead, take a look at your current financial situation and brainstorm some ways to improve it. By doing so, you’ll start 2020 off on the right foot and set yourself up for financial success in the months and years to come.

Not sure where to start? Here are eight money tasks you should add to your to-do list before the end of the year.

1. Make the most of your retirement savings

Maximizing your retirement savings is an easy way to achieve financial independence later on in life. Starting as early as possible can net you big returns, thanks to compounding interest. Take a look at your retirement accounts and figure out what you can do to maximize them before the year comes to an end.

In 2020, you can contribute up to $19,500 in your 401(k) until Dec. 31 and $6,000 in your IRA until the day you file taxes, up to April 15. Learn more about 2020 contribution limits.

2. Use up remaining FSA money

Any remaining money in your flexible spending account will go to waste if not used before the end of the year. Flexible spending accounts allow you to spend pre-tax dollars on out-of-pocket medical expenses.

The most common way to spend FSA money is co-pays and prescriptions. You can also use FSA money on health care products and services, from bandages to acupuncture. If you haven’t gotten your vision checked or had a teeth cleaning this year, FSA money can go toward that.

3. Revisit your budget

Analyze your earning and spending habits in 2019 by looking over your current budget, bank statements and credit card bills. This will help you form an effective and realistic financial plan for 2020. When reviewing your income and expenses, ask yourself questions like:

  • Are there expenses I can and want to cut?
  • Was I able to save for the things that were important to me?
  • Did I make any large purchases I regret?
  • How can I increase my income next year?

4. Contribute a little extra towards your child’s education

Have a 529 college savings plan? Try to give the full contribution limit before the year is over. Unlike retirement accounts, 529 plans are operated by the state. Check your state’s limits to learn more — we have a state-by-state guide. Make sure to find out if the contribution is tax-deductible.

5. Make last-minute charitable contributions

Charitable giving is good for the soul, but it’s also a great way to reduce your 2020 tax burden. If there’s an organization or cause you feel strongly about, make your donation before Dec. 31 to deduct it from your 2019 taxes.

But be careful: Fraud runs rampant during the holiday season. Here’s how to spot a scam.

6. Check your credit report

If you haven’t checked your credit report recently, now is the time to do so. Visit AnnualCreditReport.com and download your credit reports from Experian, Equifax and Transunion for free. Dispute any errors or inaccuracies that may be bringing down your credit score and start the new year on the right foot, credit-wise. (Here’s how to read a credit report.)

7. Make a game plan for that year-end bonus

Some employers reward their employees with year-end bonuses. If your December paycheck is a little fatter, decide how you’ll spend it. Can you use it to pay off debt or contribute more to your retirement savings? Make a plan for the bonus before it hits your account so it’s not spent impulsively.

Here are seven smart ways to spend your bonus.

8. Take advantage of credit card rewards

Some credit card rewards expire after a certain number of months. Go through your statements to see which rewards are due to expire — if not, you’re leaving money on the table.

Need more inspiration? Check out this list of 50 money resolutions.

Image: Nastia Kobzarenko