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End-of-year financial checklist: 10 tips for financial footing in 2023

Close out 2022 with a plan for your money, savings, taxes, investments and more.

A new year brings new personal, professional and financial goals and a chance to take stock of your budget. Yet if the economic rollercoaster of rising prices and interest rates in 2022 has left you overwhelmed, you’re not alone: 64% of Americans say that inflation has affected their saving and spending habits.

Finder’s personal finance experts offer a checklist to help you get a clearer picture of your financial wellness, take charge of your money and ring in a bright, prosperous 2023.

1. Reset your personal budget.

If the past three years have taught us anything, it’s that life can be unpredictable. A budget can help you understand your expenses and spending habits — and better build in a savings cushion.

“Budgeting doesn’t have to be tedious or mean giving up your peppermint mochas,” says Alexa Cruz, Finder’s banking and finance editor. “It can be as simple as setting monthly spending limits or cutting back on expenses that no longer make sense with your lifestyle.”

2. Review your retirement contributions.

December 31st is the deadline for contributing to your 401(k) or 403(b). You can contribute up to $20,500 (or $27,000 if you’re ages 50 or older) in 2022. Though don’t let maximum contributions intimidate you: setting aside even a small percentage of your income has a huge effect on your savings, thanks to compound interest. If you’re fortunate to work for an employer that offers 401(k) matching, put in as much as your budget allows to avoid leaving money on the table.

And if you’re a parent, consider opening or contributing to a 529 college savings plan before the year’s end to maximize tax breaks.

3. Reassess your savings potential.

Interest rates are at their highest in 15 years, helping diligent savers earn big. Online savings accounts offer higher APYs than more traditional accounts — more than 4% for the best high-yield savings accounts.

“A savings strategy paired with an account earning interest that’s 12 times higher than the national average can help you meet your savings goals,” adds Alexa Cruz. “From automating your savings to trying a 52-week savings plan, there’s no right way to do it. If one strategy doesn’t work, try something else.”

4. Spend down flexible spending accounts.

If you made pretax contributions to a flexible spending account in 2022, you must use what’s left by December 31st or lose the opportunity to spend it.

Many plans allow you to spend FSA money on over-the-counter medications, sunscreen, eyeglasses and hearing aids, acupuncture and other nontraditional medicine, and doctor or dental appointments — even menstrual products like tampons, pads and cups.

5. Make charitable donations.

Giving to a nonprofit you care about does more than warm the heart — it can also become a part of your tax plan. That’s because you can deduct from your taxes the cash value of most donations to nonprofits and charities, reducing the overall amount you pay. You’ll need to donate to an eligible organization by December 31st and itemize your deductions on your return.

“If you’re not sure your donation qualifies, the IRS site offers a helpful tool to confirm tax-exempt status before you give,” says Megan Horner, Finder’s head of publishing.

6. Analyze your insurance policies.

Needs can change over a year, especially with inflation at its heels. Read through your home, car and life insurance policies, and note your beneficiaries, coverage and deductible amounts.

“Make sure your coverage still matches your total assets,” says Megan Shepherd, Finder’s insurance and lending editor. “Have you accumulated more valuables? Is your car worth less than when you originally got car insurance?”

If you can pay for small repairs with your savings, you may be able to lower your premium by increasing your deductible. “Plus, it’s a good time to shop around and make sure you’re getting the best rate,” adds Shepherd. “Keep in mind new discounts you might qualify for. Did you install new home security systems or have a kid go off to college?”

7. Adjust your investment portfolio.

The stock market took a downturn in 2022, offering an opportunity to evaluate your portfolio based on your changing needs and the changing economy — or maybe it’s time to create one.

“If you’re looking to mix up your current holdings based on changing financial and economic circumstances, remember to be diligent in picking your assets,” says Mackenzie Domazet, Finder’s investments expert. “That includes stocks, which can remain a part of your strategy, especially if they are reputable and reliable companies.”

Beyond stocks, an exchange-traded fund is a type of pooled investment that allows you to invest in multiple companies with one fund purchased directly from a broker, and bonds are poised for yields in 2023 after this year’s drops.

8. Order your credit reports.

Take your financial temperature by ordering your free credit report from the three credit reporting bureaus: Equifax, Experian and TransUnion. Review the information within your report for accuracy, including personal details, open credit cards and loans, cosigners, collections data and credit inquiries.

If you catch mistakes or see signs of identity theft, immediately contact the bureau online or by phone to file a dispute.

9. Consolidate your debt.

If your financial outlook supports it, you may be able to simplify your debt through a loan that pays off your creditors and pays down your debt with one fixed monthly payment.

“A debt consolidation loan can be a way to get organized for the year,” says Bethany Hickey, Finder’s lending expert. “If you have multiple high-interest credit card balances, paying them all off with one loan may help you reduce interest charges and make monthly budgeting easier.”

A balance transfer credit card offers a way to transfer smaller debts on multiple accounts into one low- or no-interest card for 18 months or longer with good credit.

10. Don’t skip open enrollment.

If you haven’t already, prioritize your employer’s open enrollment to review and update your benefits. Open enrollment typically runs through the end of the year and allows you to choose health coverage — including dental and vision — as well as supplemental insurance, like disability. Depending on your employer, you may be able to sign up for complementary health savings plans, commuter benefits and more.

These benefits are deducted from your paycheck before local, state and federal taxes are applied to your wages, reducing your taxable income — and the taxes you owe.

If you don’t participate in open enrollment, you risk being stuck with benefits that don’t match your needs — or forfeiting your benefits altogether.

Bottom line

Crossing these tasks off your end-of-year list can help you organize your budget, plan for savings and protect your money for a strong start to the new year. And that’s worth popping the cork for.

Happy New Year from your personal finance friends at Finder. Here’s to a successful and stable 2023!

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