Year-End Financial Checklist: 5 Key Areas to Review Before 2024

As we approach the end of the year, it's easy to get swept up in the excitement of holiday plans and celebrations. However, the end of the year is also a prime time to assess your finances, reflect on the year that was, and set yourself up for financial success in the year ahead. By taking stock of a few key areas, you can ensure you're making the most of your money, reducing unnecessary expenses, and positioning yourself for a more secure financial future.

Here are five critical financial tasks to tackle before the year ends:

1. Review Your Budget: Make Adjustments Where Needed

While budgeting is a practice that many Americans commit to (84% say they do it), it’s often not done routinely or effectively. In fact, a majority (83%) of people admit to overspending each month, with 44% of them using credit cards to cover the difference. If you fall into this camp, don’t worry—you're not alone, and now is the perfect time to take a fresh look at your budget.

Why review your budget? Your financial life evolves over the course of a year. You may have paid off a debt, received a raise, experienced changes in living expenses, or reallocated some of your spending. These shifts mean that your budget likely needs to be adjusted to align with your current financial reality. As you review your spending, ask yourself these questions:

• Has your income changed? Consider any raises, bonuses, or side income you've earned throughout the year.
• Have your expenses shifted? Think about new bills (such as higher rent or a new car payment) or any costs you've reduced (like paying off a loan or eliminating a subscription).
• Are there categories where you're overspending? If certain expenses have crept up, now’s the time to get them back on track.

Action items:

• Update your income and expense categories to reflect any changes.
• Adjust your savings goals, particularly if your income has increased.
• Re-evaluate discretionary spending and cut back where possible.

2. Review Your Retirement Contributions: Stay on Track

Retirement planning is an ongoing process that requires attention throughout the year. Unfortunately, many people don’t contribute enough to their retirement savings. According to financial planners, allocating at least 20% of your monthly income to retirement is a smart guideline. However, more than half of American workers report they are not on track to retire comfortably.

Why review retirement investing? The end of the year is a good time to evaluate your progress and see how far you’ve come toward your retirement goals. If you haven’t been contributing enough, it’s important to make adjustments before the year ends. A little extra effort now can have a significant impact on your retirement security down the road.

Action items:

• Assess your current retirement account balance in relation to your goals.
• Max out contributions to tax-advantaged retirement accounts like a 401(k) or IRA (considering the 2024 contribution limits).
• If you’re behind, consider increasing your contribution percentage for the next year.

3. Rebalance Your Investment Portfolio & Harvest Losses

Just like your budget, your investment portfolio requires regular attention, especially at the end of the year. As the market fluctuates, certain investments may grow disproportionately in relation to others, which can skew your portfolio allocation. This misalignment can potentially increase risk or reduce returns in the long run.

Why rebalance? Rebalancing ensures your portfolio stays aligned with your long-term goals, risk tolerance, and asset allocation strategy. If your risk profile has changed, rebalancing also gives you an opportunity to adjust for that.

Action items:

• Rebalance your portfolio: If you originally aimed for a 60% stock and 40% bond allocation, but due to strong market performance in tech, your portfolio is now 70% equities, it’s time to sell some stocks and buy more bonds to bring it back in line.
• Tax-loss harvesting: If your investments have incurred losses this year, consider selling some losing assets to offset gains in other parts of your portfolio. This strategy can help reduce your taxable income.

4. Review Your Home Insurance Coverage: Avoid Underinsurance

It’s estimated that nearly a quarter of U.S. homes are underinsured, meaning their homeowners' insurance would not cover the full cost of rebuilding in the event of a disaster. With natural disasters like hurricanes wreaking havoc in 2024, now is a critical time to review your home insurance policy and ensure you have adequate coverage.

Why review home insurance? Home insurance policies often change over time, whether due to changes in the value of your home, renovations, or increases in construction costs. It’s essential to ensure that your policy reflects the full cost of rebuilding and replacing your home and belongings. Additionally, if your area is prone to flooding, now is a great time to add flood insurance if you don’t already have it.

Action items:

• Check that your dwelling coverage is sufficient to rebuild your home in the event of a total loss.
• Review any recent home improvements that may increase your home’s value and adjust your coverage accordingly.
• If you live in a flood-prone area, consider adding or increasing your flood insurance coverage.

5. File Claims for FSA Reimbursement: Don’t Leave Money on the Table

For those with a Flexible Spending Account (FSA), the year-end can be a crucial time. Unlike Health Savings Accounts (HSAs), FSA funds typically don’t roll over into the next year. Instead, any unused money is returned to your employer—often resulting in billions of dollars in forfeited funds every year.

Why claim FSA funds? FSA accounts can be used for a variety of eligible expenses, including medical bills, prescription costs, and even childcare. However, if you don’t use the funds by December 31, you risk losing them. Some employers offer a grace period, usually until March 15, but it’s important to confirm your plan’s deadlines.

Action items:

• Review your FSA balance and make sure you’ve used all the funds for eligible expenses.
• If you’re close to the deadline, consider making purchases for medical supplies, prescription refills, or other FSA-approved expenses.
• If your employer offers a grace period, make sure to use the extra time wisely.

How Origin Can Simplify Your Year-End Financial Planning

Origin is your all-in-one financial management platform, designed to make year-end planning—and managing your finances year-round—easier and more efficient. For just $12.99 per month, you get access to tools for tracking your net worth, budgeting, investing, saving at competitive yields, and even tax filing.

Our platform offers holistic financial solutions, including 1-on-1 meetings with financial professionals, AI-powered insights to optimize your strategy, and comprehensive estate planning tools to ensure you’re covered in every aspect of your financial life.

As the year wraps up, Origin helps you streamline your year-end tasks like investment rebalancing, tax optimization, and retirement planning, all in one place.