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Your Year-End Financial Planning Checklist

The end of the year is naturally a good time to reflect on the year behind you and plan for the year ahead, especially when it comes to your finances. In a year that has brought unprecedented challenges and financial uncertainty, making sure you protect and plan for your financial well-being is as important as ever. 

To help you evaluate your financial situation and prepare for a new year, we've put together a checklist that focuses on eight key areas: 

1. Consider Big Life Events or Changes

A variety of life events can also have an impact on your financial priorities. Some examples include:

  • Job loss or change
  • New child
  • Marriage or divorce
  • Reaching an age milestone (i.e. 59.5, 62, 65, 72)

2. Analyze Your Annual Spending

  • If you have a household budget, see how well you were able to stick to it throughout the year. What were the outliers? Do you need to adjust for next year, and if so, how?
  • Are there any expected big expenses coming up in 2021 you need to plan for?

3. Take Stock of Your Savings

  • Do you have an emergency fund with cash readily accessible?
  • If you do have an emergency fund, you may need to update your strategy and goals based on where you stand at the end of this year. Did you draw from it and need to refill, or did you grow it to the point that you may want to consider investing?

4. Evaluate Your Credit and Debt Standing

  • Do you have a revolving debt balance (i.e. credit card) that you need to develop a plan to pay down?
  • Calculate your net worth and determine if adjustments are needed when creating strategies for saving vs. paying off debt. If you have a lot of outstanding debt, you may want to look into consolidation or refinancing options.
  • If you didn’t check your credit report during the past year, take advantage of the ability to run one for free to find out your credit score.

5. Revisit Insurance Coverage Needs

  • Double check your coverage amounts, especially if you experienced a change in circumstance, such as:
    • Moving to a bigger or smaller home
    • An income change
    • A change in family

The end of the year is a good time to shop around and compare your rates, especially if you have any policies approaching renewal or maturity. The CommunityAmerica Insurance Agency offers free quotes on a variety of insurance options to help see if you could save.

6. Review Employee Benefits

  • Annual renewal and open enrollment often happen around this time for many employers, so consider your benefits and how that overlaps with your personal insurance, savings and investment plans.

7. Check in on Your Investments

  • Review your asset allocation across accounts to see if adjustments need to be made.
  • Make sure your investing priorities, account preferences and risk tolerance are up to date with your advisor.
  • Is there an opportunity to increase or a need for you to adjust retirement contributions?
  • Has a financial goal changed that requires a change in strategy?

8. Start Thinking About Taxes

  • Before year end, you may also want to consult with your tax professional to consider the timing of any additional tactics before the end of the year, for example:
    • Charitable gifts
    • Retirement contributions or account changes

This list is a good place to start as you ready yourself financially for a new year. However, if you have any questions, or would like more ideas or advice specific to your individual situation, you can reach out to one of our Wealth Advisors. Our team is happy to help you assess your finances, and make a plan for the future that's right for you.


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