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Start the Year Right: A Financial Checklist Thumbnail

Start the Year Right: A Financial Checklist

Financial Planning Life Events

As the calendar flips to a new year, it’s a perfect opportunity to review your financial situation and ensure you’re on track to meet your goals. Whether you’re looking to get organized, optimize your strategies, or make the most of tax benefits, these key financial items deserve your attention:

1. Review Your Budget and Cash Flow

Take a fresh look at your income and expenses. Identify areas where you can cut back or allocate more funds to savings and investments. Use this time to:

  • Adjust for any changes in income or expenses.
  • Ensure you’re saving enough for emergencies and future goals.

2. Revisit Your Financial Goals

Reflect on the goals you set in previous years. Are you still on track, or do you need to adjust based on new priorities or life events? Common goals to consider:

  • Paying off debt.
  • Saving for retirement, a home, or education.
  • Building or replenishing an emergency fund.

3. Maximize Retirement Contributions

Ensure you’re taking full advantage of tax-advantaged retirement accounts. For 2025, the contribution limits for 401(k)s, IRAs, and other accounts may have changed. Check if you can:

  • Max out contributions to a 401(k), IRA, or HSA.
  • Take advantage of employer-matching contributions.

4. Organize Tax Documents

The earlier you gather tax-related documents, the easier your filing process will be. Prepare by:

  • Collecting W-2s, 1099s, and charitable donation receipts.
  • Reviewing changes in tax laws that might affect your deductions or credits.

5. Assess Your Investments

The start of the year is a good time to evaluate your portfolio. Are your investments aligned with your risk tolerance and goals? Consider:

  • Rebalancing your portfolio to maintain your desired asset allocation.
  • Working with a financial advisor if you have concerns about portfolio performance or need help aligning your investments with your objectives.

6. Review Insurance Coverage

Life changes, such as marriage, a new child, or a home purchase, might mean adjustments to your insurance coverage. Check:

  • Health, life, home, and auto insurance policies.
  • Beneficiary designations to ensure they’re up to date.

7. Plan for Major Expenses

Are there significant expenses on the horizon this year? Planning ahead can help you avoid unnecessary debt. Think about:

  • Vacations or weddings.
  • Home renovations or major purchases.

8. Evaluate Your Estate Plan

Ensure your estate plan reflects your current wishes and circumstances. Important items include:

  • Updating wills, trusts, and power of attorney documents.
  • Reviewing account beneficiaries.

9. Check Your Credit

A strong credit score opens doors to better interest rates and financial opportunities. Review your credit report for errors or fraud, and take steps to:

  • Improve your score by paying down balances.
  • Avoid opening unnecessary lines of credit.

10. Seek Professional Guidance

If you’re uncertain about any aspect of your financial plan, consulting with a financial advisor can provide clarity and confidence for the year ahead.

Starting the year with a thorough financial review sets a strong foundation for achieving your goals. By staying proactive, you can navigate the new year with confidence and peace of mind. What’s on your financial checklist this year?