Year-End Financial Checklist.

Written by admin-kidglov on December 7, 2020

To make sure you’re starting 2021 in the strongest possible financial position, take a look at your must-do financial action items to close out 2020. Making sure you nail down these 5 tasks can help you save money and maximize savings in the short and long term. And couldn’t we all use a little more money next year? 

Spend down your Flexible Spending Account (FSA).
If you have one of these tax-deferred plans for medical expenses, they are great – until November rolls around and you remember that it’s a use-it-or-lose-it situation. Check the balance left in your FSA and submit your receipts. If you really haven’t spent the full amount on medical expenses for the year, then take the family to get eyeglasses or dental work. 

Make Your Giving Plans. 
Your charitable contributions – both cash and donated items – are tax-deductible, but you need to make the gift before December 31. So, if you want to write a check to your favorite causes and haven’t done it yet, now is the time. And if you’re looking to clean out your closets or bookshelves, use It’s Deductible to get the IRS-appropriate value for your donations. 

Rebalance Your Portfolio.
Do you have stock positions that are losing money and you really don’t think they’ll bounce back? Or have the gains of this uneven market recovery year overallocated you in certain sectors or asset classes? Now’s the time to talk to your financial advisor to make sure your investment portfolio is appropriately balanced for your time horizon and risk tolerance. And if lost value this year and sell by December 31 year, you may be able to claim a tax loss.  

Max Out Your 401(K).
If you haven’t already, now is a good time to make sure you’ve put as much as you can into your retirement plan, especially if your employer is matching your contributions. Either way, you can contribute the money tax-deferred. It’s a smart move you’ll feel good about once the holiday season gives way to tax season. 

Make a 529 Contribution.
Talk about a win-win. Your child or grandchild gets tax-free money for college and you can write off your contributions.  

Make a Debt Pay-Down Plan.
If the holidays are going to leave your credit card balances a bit higher than you’d like, let’s make a plan to pay them down. Maybe your holiday bonus could clean it up. Or maybe you could take advantage of super low mortgage rates to refinance your home and pay off some debt in the process. Either way, making a plan to clear the debt will make 2021 feel all the more amazing.  

You Are Now Leaving the Farmers & Merchants Bank Site