As the holiday season approaches, there’s one gift you can give yourself that will keep giving all year long: organized finances. This financial checklist includes important year-end steps to wrap up the year and set yourself up for success in the year ahead.
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Document Organization: Your Financial Checklist Starts Here
First things first – let’s get those papers in order! As a Daily Money Manager, I can’t stress enough how crucial organized documentation is for a smooth tax season. Here’s your financial checklist for getting documents organized.
Create designated folders for:
- Tax documents
- Collect your W-2s for any employment income and 1099s for any freelance, contract work, interest, dividends, or other income types. Other important tax documents include Form 1098 (mortgage interest) and Form 1095 (health insurance), along with other forms related to investments, education, or retirement.
- Major purchases and receipts
- Not all receipts need to be saved, but hold onto receipts for significant purchases, such as appliances, electronics, home improvement projects (roofing, windows, HVAC), vehicles, and business-related purchases.
- Medical expenses and records
- In addition, compile all of the documents related to your healthcare spending for the year, including doctor’s bills and invoices (surgeries, consultations), lab test bills, prescription receipts, hospital, and emergency room bills, dental and vision expenses not covered by regular health insurance, Insurance statements (EOBs—Explanation of Benefits), and any medical transportation costs.
- Charitable contribution receipts
- These kinds of donations are deductible, and documentation should be kept for tax purposes: monetary donations to qualified charities (cash, check, credit card), donations of goods or property (clothing, furniture, vehicles), volunteer-related expenses (e.g., mileage, supplies purchased for a charitable event), stock or securities donated to charities, any business expenses if applicable.
- Tip: Be sure the organization is an IRS-approved 501(c)(3) nonprofit. You can verify this through the IRS Tax-Exempt Organization Search.
Pro tip: Use a document-scanning app or a good scanner (we use this ScanSnap iX100 Wireless Portable Scanner) to digitize important documents. Store them in a secure cloud service for easy access when needed or an external drive used exclusively for these important files and documents. This makes future access a breeze.
✨ See how a financial calendar gives you a year-round view of bills, income, and important deadlines—no more surprises. Mastering Financial Organization: Creating a Timeless Financial Calendar
Financial Checklist: Year-End Review Items
Think of this as your financial health check-up. Set aside time to review this financial checklist:
- Bank accounts and credit card statements
- Reconcile your accounts to look for discrepancies, analyze spending categories, and identify dormant accounts. So, this is a great time to review and adjust your current budget and set any new financial goals for the New Year.
- Subscription services
- Make a list of your current subscriptions and cancel unused or unwanted ones. Budgeting software can help you spot these recurring charges quickly.
- Insurance policies
- Thoroughly review your home, auto, health, and life insurance policies to assess coverage adequacy, check for beneficiary updates, evaluate your premiums and costs, and review any HSA or FSA accounts. A review of your insurance policies makes sure you’re not overpaying for unnecessary coverage while being protected in case of an emergency.
- Investment accounts
- Next, review your investment portfolio to assess its overall performance, adjust your asset allocation, and review your account fees. So, this is a great time to align your investments with your financial goals and reevaluate your retirement account contributions. Before the year ends, consider taking advantage of tax-saving opportunities such as harvesting tax losses and reviewing your dividends.
- Retirement contributions
- Then, look through the maximum contributions for your investment account type and consider maxing out your contributions before the end of the year.
- Unclaimed funds
- Finally, be aware that unclaimed funds refer to money or financial assets that have been abandoned or forgotten due to inactivity, such as life insurance payouts, uncashed payroll or dividend checks, or utility or insurance refunds. Check for unclaimed funds here or with the Pension Benefit Guaranty Corporation for any unclaimed pensions.
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Schedule Professional Check-ins
Don’t wait until April to talk to your tax preparer for your sanity as well as your preparer’s. As a result, December is the perfect time to work through this financial checklist:
- Schedule a tax planning meeting
- For example, review your taxable income, talk through potential tax deductions and credits, estimate taxes owed and refunds due, and adjust your withholdings or make an additional tax payment to avoid penalties.
- Review estate planning documents
- Additionally, estate planning documents are not “set it and forget it” tools. Review your wills and trusts, power of attorney, advance healthcare directive, and any beneficiary or guardianship provisions, and update these documents with any life changes, asset updates, or tax law changes. Create your digital estate plan here!
- Check in with your financial advisor
- Moreover, meeting with your financial advisor will help you evaluate your overall financial strategy. This is a great time to plan for major life changes, review your investment portfolio, and assess your retirement contributions.
- Update beneficiary information
- Look over your primary and contingent beneficiaries, how your assets will be distributed if you need spousal consent, and any special considerations like setting up a trust for any minor beneficiaries. Review beneficiary information for your retirement accounts, life insurance policies, investment and brokerage accounts, bank accounts, and health savings accounts.
📌 Find out which tax deadlines apply to your situation and what to do if you need more time. Navigating Tax Season: Timeless Tips for Every Year
Financial Checklist: Planning for the New Year
Set yourself up for financial success by:
- Creating a fresh filing system
- First, head into next year with a new filing system to avoid overwhelm, streamline access, and boost productivity when you need your files. Set a filing system by sorting your existing documents, choosing a digital or physical filing system, creating clear categories, and labeling every file.
- Scheduling regular financial check-ins
- For scheduling, these can be biweekly, monthly, or quarterly. Check-ins will help you stay on track to meet your financial goals for the New Year. Here are 5 budgeting apps to keep you on track, along with more information on how to master your budget.
- Planning for major expenses ahead
- Outlining expenses you anticipate in the coming year will help you feel prepared so you can plan to save and budget for them. Common major expenses include vacations, home repairs or renovations, taxes, and health and educational expenses.
- Updating your budget for the new year
- Lastly, adjust your budget to account for income changes and financial goals. Then, automate your savings, or cut back on discretionary spending. This will reduce financial stress, improve decision-making, and avoid credit card debt.
➡️ Organizing your finances isn’t just about tidying paperwork. It also gives you and your family peace of mind. Taking these steps now will help you start the new year with confidence and clarity.
Want more financial organization tips? Check out our monthly financial to-do list or learn about the benefits of working with a Daily Money Manager.
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