The end of the year offers a natural moment to pause, reflect, and plan for the future. While you might be setting goals for personal growth or new hobbies, it’s also the perfect time to review your financial health. A thorough year-end financial checklist can help you understand where you stand and set a course for success in the coming year. This process doesn’t have to be complicated. With the right guidance and tools, you can feel confident and prepared for what lies ahead.
At 1st Ed Credit Union, we are committed to helping our members achieve financial stability. This guide provides a simple yet comprehensive financial checklist to help you organize your finances for a prosperous new year.
The Ultimate Year-End Financial Checklist
Getting your finances in order is a powerful way to start the year. Use this checklist to review your progress, identify opportunities, and make informed decisions.
1. Review Your Budget and Spending Habits
The foundation of any solid financial plan is a clear understanding of your income and expenses. Before you can set new goals, you need to know where your money went over the past year.
- Track Your Spending: Look back at your bank and credit card statements from the last few months. Categorize your spending into essentials (housing, utilities, groceries) and non-essentials (dining out, entertainment, subscriptions).
- Identify Areas for Improvement: Did any spending categories surprise you? Are there subscriptions you no longer use or areas where you could cut back? Identifying these patterns is the first step toward making meaningful changes.
- Set a New Budget: Create a realistic budget for the new year. Allocate funds for your savings goals, debt repayment, and daily expenses.
1st Ed Credit Union’s Online and Mobile Banking makes this process easy. You can review your transaction history 24/7, giving you a clear picture of your spending habits right from your computer or phone. And don’t forget about our SmartWallet, giving you more control than ever over your debit and credit cards.
2. Assess Your Debt Repayment Strategy
Debt can be a significant barrier to achieving your financial goals. A year-end review is an ideal time to evaluate your loans and create a plan to pay them down more efficiently.
- List All Your Debts: Make a list of all your outstanding debts, including credit cards, auto loans, personal loans, and student loans. Note the current balance, interest rate, and minimum monthly payment for each.
- Prioritize High-Interest Debt: Focus on paying off the debt with the highest interest rate first, as this will save you the most money over time. Continue making minimum payments on all other debts.
- Consider Consolidation: If you have multiple high-interest debts, consolidating them into a single, lower-rate loan could simplify payments and reduce your total interest paid.
At 1st Ed, we offer competitive rates on various loans, from personal loans to our Visa® Platinum credit card with a great rate and fee-free balance transfers. Making your payments is also simple with our online loan payment portal.
3. Complete Your Retirement Savings Financial Checklist
It’s never too early or too late to focus on retirement. Your end-of-year financial checklist should include a thorough review of your retirement accounts to ensure you are on track.
- Check Your Contributions: Did you max out your retirement contributions for the year? If not, see if you can increase your contribution amount for the new year. Even a small increase can make a big difference over time.
- Review Your Investments: Look at your portfolio’s performance and asset allocation. Ensure your investments still align with your risk tolerance and long-term goals.
- Explore Savings Options: If you don’t have a retirement plan, now is the time to start. 1st Ed can help you explore savings options like Certificates and IRAs, which offer competitive rates to help your money grow.
4. Prepare for Tax Season
Getting a head start on tax preparation can save you from stress in the spring. Organize your documents now so you are ready when it’s time to file.
- Gather Important Documents: Collect W-2s, 1099s, receipts for deductible expenses, and statements from investment accounts. Create a dedicated folder, physical or digital, to keep everything in one place.
- Review Life Changes: Did you get married, have a child, buy a home, or change jobs? These life events can impact your tax situation, so it’s important to understand how they might affect your filing.
- Contribute to Tax-Advantaged Accounts: You can often make contributions to accounts like an IRA for the previous tax year up until the tax filing deadline. This can be a smart way to lower your taxable income.
5. Set Financial Goals for the New Year
With a clear picture of your financial situation, you can set exciting and achievable goals for the year ahead. Your goals should be specific, measurable, and time-bound.
- Emergency Fund: Aim to save three to six months’ worth of living expenses.
- Major Purchases: Plan for a down payment on a new car or home. 1st Ed offers great rates on Auto Loans and Mortgages to help make your resolutions a reality.
- Invest in Yourself: Are you thinking about going back to school? Our scholarship program and student loan programs help members make their dreams of higher education a reality.
Let 1st Ed Credit Union Be Your Partner
Completing your year-end financial checklist is a significant accomplishment. At 1st Ed Credit Union, our purpose is to provide you with the quality services and personal attention you need to maintain financial stability. From our convenient Online Banking to our competitive loan rates and friendly service, we are here to support you every step of the way.
It makes sense to belong. If you are ready to partner with a financial institution that puts its members first, we invite you to join our community. From all of us at 1st Ed Credit Union, we wish you a very happy, healthy, and prosperous New Year! Become a member of 1st Ed Credit Union today