5 Financial Moves to Make Before the End of the Year
We’re closing in on the end of the year, which means it’s a great chance to take stock of your financial situation. To reflect on what's gone well this year, what could be improved, and what you need to do to put yourself in the best situation possible going into next year.
Here are five moves you can start making right now to improve your financial situation before the end of the year:
1. Review your goals and set new ones.
Block some time off in your calendar to review those goals, update them as needed, and set new goals for the coming year. It is possible your life and your circumstances have changed over the past 12 months, and your goals should reflect those changes.
2. Optimize your employee benefits.
The end of the year is open enrollment season, which means your employer will probably be sending you a big packet of information about your 2021 employee benefit options. This includes dental and vision insurance, medical FSA, life and disability insurance, and other perks.
3. Use any remaining FSA money.
One of the tricky parts of a medical FSA is that the money is often use it or lose it. That is, any money that's still in your account at the end of the year is gone forever. So, there's still time left to check your FSA account balance and think about how you might want to use it before the end of the year.
Do you need new glasses? Do you ave any medical care you've been putting off? Maybe your child could use a trip to the dentist?
See if you can find a use for this money before the end of the year so that it doesn't go to waste.
Note: Not all FSA plans are 100% use it or lose it. Some offer a grace period where you're allowed to use the money for a certain period of time after year end. Others will let you keep up to $500 for the next year. Check your specific plan details to see what leeway you're allowed here.
4. Rebalance Investments.
Rebalancing your portfolio will help you maintain your original asset-allocation strategy and allow you to implement any changes to your investing style. It is a perfect time to meet with your financial planner to make any adjustments for the coming year.
5. Record your net worth.
Your net worth is your single most important financial number for the simple reason that just about every good financial move you make serves to either increase it or protect it.
And that means that tracking your net worth over time will help you gauge whether the financial moves you're making are actually working. If your net worth is increasing, you're making progress. If not, it might be time to re-evaluate the decisions you're making.