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End-of-Year Money Moves: Seven Steps to End 2023 Strong

End-of-Year Money Moves: Seven Steps to End 2023 Strong

December 01, 2023

December tends to be a blur filled with holiday parties, sweet treats and family time. But before the New Year comes, it’s important to take a break from the festivities and review your finances. It may not sound like the most fun way to spend your holiday break, but a small investment of your time can go a long way toward starting the year on a positive note.


Adjust Your Budget

Start by reviewing what you’ve spent throughout 2023. Did you go overboard on eating out? Was your family vacation more expensive than you had planned? Do you still have debt to pay off? Take an honest look at your spending habits over the last year and identify any changes that need to be made in order to help you be more prudent with your money. Make sure your budget for next year is built around the principle of “paying yourself first,” so that your savings and financial goals remain a priority.


Create An Emergency Fund 

One of the best savings goals is to set up an emergency fund, which helps pay for unexpected expenses like medical bills or car repairs. If you don’t have an emergency fund yet — one in five Americans don’t — or if you’ve dipped into your savings over the past year — commit to building up your emergency fund for 2024. Aim to save three to six months’ worth of living expenses and keep the money separate from your everyday checking account.


Max Out Your Retirement Accounts

Making additional contributions to your retirement accounts can help you lower your taxable income for 2023. While you can make IRA contributions up until Tax Day, any 401(k) contributions must be made by the end of the year. In 2023, you can put up to $22,500 into a 401(k). People age 50 or older can put in an additional $7,500 on top of that. If you have an employer-sponsored 401(k), make sure you save at least enough money to get any matching contributions offered by your company. Saving as much as possible for your future retirement not only comes with tax advantages, but it also helps grow your money faster through the power of compound interest.


Make Charitable Contributions

Many people like to donate to their favorite charities or causes during the holiday season, but make sure you’re giving strategically. Taxpayers who itemize can get a tax deduction for charitable contributions, but since the majority of Americans take the standard deduction, there are other ways to benefit. Those over age 70 ½ can donate to charity using a qualified charitable distribution from an IRA. If you make a qualified charitable distribution before the end of the year, you’ll satisfy your required minimum distributions and lower your taxable income because the money is withdrawn and given directly to a charity.


Set Your Financial Goals

Reaching your goals takes intentionality, so set aside time to think about your short-term and long-term goals. Review the progress you’ve made on your 2023 goals, and think about what you want to accomplish in 2024. Studies have shown that writing down your goals can increase your chances of success by over 40%! Whether it’s saving for a downpayment on a house, paying off debt or starting an emergency fund, having clear goals can help guide your financial decisions.


Review Your Investment Portfolio

From bank collapses and a near-government shutdown to continued federal interest rate hikes and inflation, a number of events have had an impact on stock market performance over the past year. Take a look at your investment portfolio to ensure it still aligns with your financial goals and risk tolerance. If you’re nearing retirement, you might need to seek out safer investments to protect your money from market volatility. No matter what stage of life you’re in, a financial advisor can help determine if you should rebalance your portfolio and design an investment strategy that fits your unique needs.


Meet with Your Advisor

Consider meeting with a financial professional to review your situation and strategize for the year ahead. If you can’t squeeze something in before the end of the year, set a date in January to start the year off right. Planning for retirement can be complex, but an advisor can help you sort through every decision, from tax strategy and Social Security optimization to income planning and risk management.


Bonus: Planning to Retire in 2024?

If you hope to retire next year, congratulations! Before you break out the champagne and book a tropical vacation, take this piece of advice: Make sure you have a retirement plan that addresses your financial, emotional and social needs. Our customized financial roadmaps take care of the financial aspect by taking into account your retirement income, projected expenses and investment strategies to ensure you have enough money to support your desired lifestyle. We also work with clients to create a retirement budget that includes withdrawal strategies to help you get the most out of your money.


We pride ourselves on doing things differently, and that includes planning for your emotional and social needs in retirement. It’s important to take the time to think about the experiences you want to have in your next phase of life. From pursuing a new hobby and traveling the world to making memories with friends and families, the possibilities are endless! Your retirement plan should be designed to help you turn those dreams into reality.


You only retire once, but we’ve helped hundreds of people retire successfully. Whether you’re planning to retire in 2024 or you need guidance on one of these end-of-year money moves, reach out to schedule a meeting and learn how we can help. If you want to stay up to date on the latest financial news in the New Year, follow us on Facebook and LinkedIn.