The holidays are right around the corner, which means 2023 is quickly coming to an end. Before ringing in 2024, take a few minutes to review the family finances and make some smart money moves.
I get it: With shopping, parties, guests and the holidays, year-end is crazy busy. But think of it this way: The moves you can make now may take less than an hour, could make you thousands of dollars richer, and may no longer be available after the clock strikes midnight on Dec. 31.
Here’s a quick checklist of money moves to consider. Not all may apply to you, but some will, so read the entire list. And remember, you don’t have to do everything in one day. Do a task or two per day while you’re eating lunch or watching TV.
1. Review your investment accounts
Review your investment accounts and make sure you have the right balance of stocks, bonds and cash. Look at your returns for the year, in all your accounts, retirement and non-retirement, and think about whether you need to make changes to your investment strategy. Make sure your portfolio aligns with your time horizon and risk tolerance.
If you’ve done well in stocks and are considering a hedge, you might try gold, but for no more than 10% to 15% of your portfolio. See “As Gold Hits All-Time Highs, 4 Things You Need to Know.”
As your investments grow, consider getting an expert set of eyes to make sure you’re on the right track. If you’ve got $100,000 or more in investments, check out a free service called SmartAsset. You fill out a short questionnaire and instantly get matched with up to three vetted, fiduciary financial advisers in your area. Typically, you can get a free initial consultation.
2. Max out your tax deductions
Every $100 of deductions you find now can reduce your federal tax bill by up to $37 next April. Some possibilities:
- Max out your traditional 401(k) or workplace retirement plan by Dec. 31. For 2023, the 401(k) contribution limit for employees is $22,500, or $30,000 if you are age 50 or older. Make sure you’ve contributed all you can, and that’s especially true if you’re getting a match from your employer. (That’s free money!)
- No 401(k)? Use an IRA. In 2023, you can contribute up to $6,500 — or up to $7,500 if you are 50 or older — tax-deferred, to a traditional individual retirement account.
For more on income taxes, see “25 Tax Planning Tips for Now and the Future.”
3. Sign up for free daily money advice
The more you learn, the more you can earn. Take a minute or two every day to learn a little about saving more, spending less, investing and other topics that will make you richer.
If you’re not already subscribed, one thing you can do right now is subscribe to the free Money Talks Newsletter. We’ve been offering free money news and advice to millions of Americans for 32 years. Click here to sign up. It only takes two seconds. And if you don’t like it, it only takes two seconds to unsubscribe.
4. Stop paying retail
With the inflation we’ve seen over the last couple of years, it’s more important than ever to use all available tools to keep costs down.
Free services like Rakuten and Capital One Shopping can help you save serious money when buying online. Rakuten can get you rebates of up to 30%. Capital One Shopping compares prices across the internet so you know if an item you’re purchasing is cheaper elsewhere.
Tools like these are free and easy to use. For more ideas, see “15 Golden Rules for Saving on Every Purchase.”
5. Max out your health care accounts
If you have a health care flexible spending account (FSA) through your employer, check your balance. If unused funds won’t roll over into the next year (some plans allow rollovers, some don’t) be sure to use up the remaining funds before the year ends. Not sure if your plan has a rollover option? Ask your HR department.
If you qualify for a health savings account (HSA), make the maximum allowable contribution before year-end. For 2023, that’s $3,850 for individuals and $7,750 for families, plus an additional contribution of $1,000 if you are age 55 or older.
Don’t have an HSA yet? If you have a high-deductible health plan (minimum $1,500 deductible for an individual or $3,000 for a family in 2023) you definitely should set one up. There are plenty of places you can do that, including Lively HSAs. For more info, see “Health Savings Accounts and Why They Are Great for Retirement.”
6. Review your insurance
After income taxes, this is the area where you’ll likely earn the biggest return on the time you invest.
Review your insurance policies – health, home, auto, life, disability and so on. Make sure your coverage limits meet your current needs and the policies still fit your circumstances. Shop around to see if you can find better rates:
- Car insurance: Use a comparison site and see if you can get the same coverage for less money. Don’t be surprised if you find cheaper coverage; insurance companies love to raise rates, knowing you won’t go through the hassle of shopping. One site you can try is Provide Insurance, where you can compare 175 different carriers in minutes. Either you’ll find a better deal, or feel comfort in knowing you’re not overpaying.
- Life insurance: If you already have life insurance, see if you’re paying too much. If you don’t, see how much it will cost. It’s easier than you think: For example, Ethos is a company that lets you apply online in minutes without getting off the couch. There are no medical exams, no blood tests, and you might find term life insurance for as little as $7 a month.
If you’re reaching the age where you’re becoming concerned about nursing home costs, get a quote from a provider of nursing home insurance. (Long-term nursing home stays aren’t covered by Medicare.) If you want to see what it would cost, GoldenCare is one place you can get a free quote. Note, however, they don’t issue policies in Florida.
7. Check your credit report and deal with debt
It’s a good idea to check your credit report at least once a year for any errors or signs of fraud. You can get free reports from the major bureaus at annualcreditreport.com. Dispute any inaccuracies you find.
If you’re struggling to pay off debt, stop losing sleep and do something about it. There are companies offering free advice and inexpensive programs designed to make you debt-free. They typically deal with unsecured debt, ranging from credit cards to student loans. One you can try is National Debt Relief, but there are plenty of others.
If you need help with income tax debt, talk to a local CPA or a specialist like a tax debt lawyer.
If you don’t need professional help to tackle your debt, but would like some tips, check out “The Best Way to Kill Off Credit Card Debt.”
8. Make sure you’re getting what you deserve
If you’ve got money in the bank, make sure you’re earning the most you can.
Many banks, especially the big ones, still insist on paying insultingly low rates — as low as 0.1%. How can they get away with this when other insured accounts are paying up to 5%? Easy. They hope you’re not paying attention. So, pay attention, because 5% is 50 times more than 0.1%.
Finding insured savings with top rates is as easy as checking out a savings comparison table. There are tons of free online comparison sites that can help you find top rates on insured savings in seconds.
Do a comparison, find a better deal, and move all or part of your savings. Transferring from one bank to another is probably easier than you think.
9. Develop the right mindset
Now’s the time to decide what you want to accomplish over the next 12 months. Make your targets reasonable. Remember, this is a marathon, not a sprint.
Set some specific financial goals for 2024:
- Exactly how much will you save?
- What progress will you make toward your retirement or other financial goals?
- How much debt will you destroy?
Once you’ve established your goals, think about everyone involved. If it’s going to require a family effort, involve the family. You’ll never get anywhere if you’re all paddling in different directions.
Don’t let bumps in the road cause you to run into a ditch. If things go awry — and they absolutely will — regroup and start over.
Last but definitely not least: Take a few minutes and create a detailed mental picture of your future self. Once you’ve imagined how you want your life to look, focus on that vision early and often. Because odds are that how you picture yourself is who you’re ultimately going to become.
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