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End-of-Year Financial Checklist

As December draws to a close, it's an excellent time to make sure your money and budget are in order before ringing in the new year. This is especially important because decisions you make this year could benefit you when you file your taxes, and getting organized now also means making things easy for your future self and a financially prosperous new year. We've got a few tips for you to close out this year on firm financial footing!

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Get Your Paperwork Organized

A good strategy for many is to divide all your finance-related papers into three piles:

  1. Anything you need to file your tax return should be kept within easy reach, like W-2 and 1099 forms and any pending bills, current insurance policies, and recent bank, credit, and retirement account statements, if applicable. Put receipts for major purchases into this group, too, such as a car or boat.
  2. Any records like birth certificates, Social Security cards, education transcripts or certificates, medical histories, marriage certificate or divorce decree, and other legal papers. Some of these are best kept either in a safe deposit box or in a fireproof safe at home.
  3. Any paid or reconciled bills and account statements, expired warranties, and insurance policies are probably safe to shred. After seven years, tax returns and other documentation are also safe to shred.

Compare Your Debts, Monthly Bills, and Income

Now that you have all your papers together list out everything you owe. Think about your mortgage or housing payment, a car loan, any credit card balances, education-related debt, and other personal obligations. Add up the minimum monthly payment for each, so you'll have a baseline on what you'll need to cover these expenses each month. Add your average monthly costs for routine needs like food, gas, and insurance. Then, total up your take-home income and look at the two totals side by side to lay the foundation for a budget.

Even if you've been following a spending plan all year, it's best to start off with a fresh take on it. Things change after all, and unless you've been tweaking your financial roadmap regularly, it can quickly get out of balance.

What You Should Do Financially Before Year-End

  • Contribute to Your Retirement: If you don't have a retirement account, open one as soon as possible! Different types of retirement savings accounts, like a 401(k), are tax-deferred savings plans. This means the money is not taxed as income until it's used during retirement. The money you invest in your retirement account during the year is deducted from your gross income, which reduces your taxable income, so more of your money stays in your pocket. Check with the Internal Revenue Service (IRS) to see how much you can contribute annually to different types of retirement savings accounts. You can always add more money to your account before the end of the year. Or, you can start a new retirement account if you don't have one already. Make sure to do your homework since there are different rules and restrictions for each type of account. WaFd Bank offers two types of Individual Retirement Accounts (IRAs): traditional and Roth.
  • Give to Charity Before the End of the Yearr: You might be able to claim donations you’ve made to charitable organizations on your taxes to potentially reduce your tax burden. Speak with a tax advisor for more information on the tax benefits of various charitable donations.
  • Review Your Health Savings Account (HSA) or Flexible Spending Account (FSA): HSA and FSA accounts allow you to put money aside from your paycheck (before taxes) to pay for qualifying healthcare costs to reduce your taxable income. If you participate in one of these plans, make sure you know whether your plan allows rollover funds so you can use that money next year or if it requires you to use all of the money in the account by the end of the year so you don't let money go to waste.
  • Set Your Saving Strategy: No matter what time of the year, creating and sticking to a budget is always a good idea. Start by looking over your finances and making a list of what your monthly earnings and expenses usually are, grouping them into different categories so you can see where your money goes and what money is left over for fun and entertainment. Use a budgeting app or create a worksheet to keep track of your ongoing income and expenses.
  • Contribute to Your Child's College Savings Plan: Although you may not see any direct impact on your taxes based on contributions to your child's college savings plan, your investment in their future will pay dividends down the road. There are several types of college savings plans to choose from that can grow your savings over time. Make sure to investigate each investment option closely. WaFd Bank offers the Coverdell Education Savings Account, allowing you to make after-tax contributions of up to $2,000 annually per child. When the funds are withdrawn, they are tax-free.

Set Financial Goals for the New Year

A road map, financial or otherwise, isn't much use without a destination. So, set some goals for next year and for each month or pay period. Make them realistic and attainable, both over the short term and long term. Your goals should be specific with a set time frame. For example, your goal might be to save $50 a month to have a gift fund for the holidays or add $2,000 to your retirement fund by year-end.

Want Help Managing Your Money?

No question is too small for our friendly bankers! We're here to help! No question is too small, and with WaFd Bank, you also have access to tools and services to help you manage your finances and get the most from your money. Visit us at your neighborhood branch, give us a call at 800-324-9375, or check out what WaFd online banking has to offer.


Find your local WaFd Bank Branch


Find your local WaFd Bank Branch

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