As the year winds down, the last thing on your mind might be your finances. Between holiday planning, gift shopping, and cozy nights in, reviewing your budget or retirement accounts can feel like a chore. But here’s the thing: taking a few strategic steps before December hits is one of the smartest money moves you can make.
A pre-holiday financial checkup sets you up for a stress-free holiday season and a prosperous new year. It’s your chance to course-correct, use up expiring benefits, and make choices that could save you money on taxes. Ready to give your finances a tune-up? Here are 7 essential tasks to tackle before the ball drops on New Year’s Eve.
1. Review Your Budget & Spending
Before the holiday shopping frenzy begins, take a clear-eyed look at your budget. How did you do this year? Compare planned versus actual spending. Notice any categories where you consistently overspent (we’re looking at you, food delivery apps) or areas where you saved more than expected. This isn’t just about numbers, it helps you finish the year strong and set a realistic budget for next year.
2. Max Out Your Retirement Contributions
Here’s a move your future self will thank you for. If you have an RRSP or another employer-sponsored plan, check your contributions. Are you on track to hit the annual max? If not, see if you can boost contributions in the last few pay periods. Not only does it grow your retirement nest egg, but it also reduces your taxable income for the year.
3. Check Your Flexible Spending Account (FSA)
If you have an FSA for healthcare expenses, remember the “use-it-or-lose-it” rule. Most plans require funds to be spent by December 31st (some offer a short grace period). Now’s the time to schedule that dentist appointment, grab new glasses, or stock up on eligible over-the-counter items. Don’t let that money vanish!
4. Conduct an Investment Portfolio Rebalance
The market has likely shifted your asset allocation over the year. Rebalancing, selling some outperforming assets and buying underperforming ones, keeps your investments aligned with your risk tolerance and goals. It’s the classic “buy low, sell high” move that prevents risk from creeping too high.
5. Review Your Insurance Policies
When was the last time you checked your home, auto, or life insurance? Life changes, marriage, a new child, or a new home, can affect coverage needs. Year-end is a great time to shop around for better rates or ensure your policies reflect your current situation.
6. Plan Your Charitable Giving
The holiday season is about giving, and it can also be a smart tax strategy. If you itemize deductions, charitable donations (cash or appreciated assets like stocks) can reduce taxable income. Make sure donations are made by December 31st and keep receipts for contributions over $250.
7. Set Financial Goals for Next Year
Don’t wait until January 1st to think about resolutions. What do you want to achieve financially next year? Saving for a down payment, paying off a credit card, or finally opening a new TFSA? Set clear, measurable goals now so you can hit the ground running in January with confidence and motivation.
Your Finances Will Thank You
Spending an hour or two on these seven tasks is an investment in your future peace of mind. You’ll head into the holiday season with clarity, knowing you’ve made proactive decisions to protect and grow your financial well-being.
So, pour yourself a pumpkin spice latte, slip into your coziest socks, and get it done. Your future self will be thrilled you did.
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