10 ways to maximize your end-of-year finances


Runners nearing the finish line

Oh, 2015, where did you go? It seems only moments ago it was time for New Year's resolutions, and now here we are again. With only a month left before another year is behind us, you may be wondering how best to maximize this year's finances. Well, look no further!

1. Prepare for taxes.

Hopefully, you've already started to put the year-end tax-planning 2015 checklist to good use. But here's another item: If you pay taxes quarterly, make sure you send in that final payment —  and, ideally, save a little bit extra if you think you might owe. (It seems like I always end up owing just a little more than I projected.)

2. Go to the doctor/dentist/eye doctor.

This step is especially vital if you have a flexible spending account, or FSA, which allows you to set money aside pre-tax for health-related expenses but which has limited rollover capability (a maximum of $500 if your employer participates). But even if you've been paying for insurance and still have benefits you haven't used (say, an eye exam and new lenses, or a teeth-cleaning), it's still good to squeeze those appointments in before year's end.

3. Evaluate your health situation and health plan during open enrollment.

If you were in the situation above where you were potentially leaving benefits on the table, maybe you can switch to a high-deductible health plan to align your payments with the level of use you anticipate. Or maybe a recent diagnosis or plans to add to your family mean you need something more robust next year.

If you have a health savings account (HSA) and can afford to max it out, good on you — those roll over indefinitely. If you have an FSA, now is the time to adjust your contributions for next year so you don't risk losing money. If you just got new glasses, maybe you skip vision insurance for next year, etc.

4. Finalize your charitable contributions.

Not only is this good to do for tax purposes, but now is the time of year when the demand for many charities' services is most overwhelming. Help your fellow man (or animals, or whatever your charity of choice may be) and give back.

Or maybe you've crunched the numbers and the money's just not there. But that doesn't mean you've got nothing to give! If you go through your belongings, maybe you can identify clothes, books, or nonperishable food items you no longer need or want. Free up some space in your closets and shelves and pay it forward at the same time.

5. Revisit your resolutions and goals.

In late 2014, we made a list of prioritized home improvement projects to tackle in 2015. We accomplished two of the four goals, did some research, and set longer-term goals for the remaining two. Did you set goals that you haven't accomplished? If you're close — say, you wanted to max out a retirement account, squirrel away a certain amount in a high-yield online savings account, or pay off a particularly pesky debt — can you squeeze your budget a little tighter and reach it by year's end?

6. Set a holiday budget — and stick to it.

Nothing starts the new year off on a sour note like a spending hangover due to holiday binge-spending. By now you probably have a good idea of your personal and professional commitments. Decide how much money you are willing to allocate toward your participation and stick to your guns. Not only will your bank account balance thank you, maybe you'll give a colleague or loved one the courage they need to set their own limits. Now that's the gift that keeps on giving!

7. Make exchanging gifts easy (and cheap!) on your loved ones.

Even if you're not into the whole gift-giving tradition yourself (personally, receiving gifts makes me feel really awkward), sometimes there's no easy way to back out. For example, my husband's family is really into the whole gift-giving scene. So I make sure my wish list is packed with relatively inexpensive items I know I'll get use out of:

  • Hair ties
  • My favorite lip gloss
  • Hot hands hand warmers (seriously, my office gets SO COLD)
  • Candy (I love Warheads, and a bag of these lasts a long time because if I eat more than one a day I burn my tongue)

For parents/grandparents, a photo book (or something similar) is relatively inexpensive and keeps the focus on family while making and cherishing memories.

8. Pitching in with others on gifts can help you stay on budget.

When it comes to giving gifts, going in with several family members may mean you can get someone something more expensive than anyone could afford on their own. That way everyone stays on budget.

9. Review spending trends to identify cash-flow leaks.

Did grocery spending spiral out of control in the second half of the year? Or maybe you started hitting the drive-through a little too often. If you've been collecting detailed financial data throughout the year, analyze it and look for other signs of financial leakage.

For example, gym memberships surge in January; but if you signed up last year and haven't been going, take this opportunity to cut the cord instead — ditto with cable or other subscription services you don't use or need.

Change is hard, but if you can identify the psychology behind your bad habits, you're one step closer to replacing those habits with better ones.

10. Set yourself up for success at work.

Just another friendly reminder that it's performance-review season at work. So spend some extra time buckling down and being really strategic before you ask for a raise. Earning more money isn't a short-term fix; it's a financial victory that will put you on improved financial footing for years to come. At least, that is, as long as you spend or save that additional money mindfully rather than leaping on the hedonic treadmill and giving in to the siren song of lifestyle inflation!

Final thoughts

Some of the items on this list are technical, some are time-consuming or otherwise complicated, and others are a cinch. They run the gamut from taxes to holiday parties because money touches every aspect of our lives, and it's important to take everything into consideration if you want to reach your financial goals. Best of luck as you maximize your year-end finances to reach your goals!

What's on your to-do list for maximizing your end-of-year finances? Share your tips in the comments below!

More about...Budgeting, Planning, Taxes

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My Factoring Network
My Factoring Network
4 years ago

Well many of us are always in the race to earn money and make more money as much as possible. By the year end we should start thinking about the next year, but the point to ponder is
what to do with the present money and current situation prevailing. I loved the point about going to doctor for a health checkup. It’s also the time to check the taxation part of your income. Revise them.

MrRicket
MrRicket
4 years ago

Thanks for your interesting article as usual.

I found the ‘Prepare for taxes’ section. Over here in Malta, taxes for the year are forecast and deducted from payslip, whether you like it or not 😛

Oh well, someone has to pay the bills I guess 🙂

Cheers
MrRicket

Rahul
Rahul
4 years ago

The holiday budget is killer! I love this time of the year, but I dread it as well. Knowing some of my goals might be affected by overspending in this category. Going to try to do a lot of DIY gifts this season and save money.

Karthigan Srinivasan @ StretchADime
Karthigan Srinivasan @ StretchADime
4 years ago

Ensure that you top off your 401k contribution to the IRS specified limit of $18K for 2015. If you are 50 years or older, you can contribute an additional catch up contribution amount of $6000.

If you have extra money that you would like to save, start a Traditional or Roth IRA. Based on your income level, you might be eligible for a tax deduction.

All these things above will bring your 2015 taxable income down, which is a good thing.

freebird
freebird
4 years ago

If you haven’t done your tax loss harvesting yet for this year, you may be in for a shock. The past few weeks have seen a severe price erosion in many of the weaker stocks over this past year.

On the other hand some of these last-minute slides offer promising January effect plays if you can distinguish them. This is where I’m doing all my Christmas shopping this year.

Josh
Josh
4 years ago

I typically visit the eye doctor at the end of the year to capitalize on insurance & put some HRA money towards contact lenses.

This year, my wife & I are looking at the holiday budget and making sure we stick to it. We are already planning to cut somewhere else, as we are traveling to my parents for Christmas this year.

James Pollard
James Pollard
4 years ago

Whew! Thanks for reminding me about making my charitable contributions. I usually have them done by now, but I must’ve forgotten this year. I always donate to the SPCA – I might switch it up this year.

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