As 2025 draws to a close, it's time to take a comprehensive look at your finances and prepare for the upcoming year. A well-structured financial plan can help you achieve your goals, avoid unnecessary stress, and make the most of your hard-earned money.
This top-five, year-end financial checklist, combined with consultation of a trusted financial advisor, provides essential steps to ensure your financial health is moving forward.
Review Year-to-Date Budget & Spending
Compare your actual spending to your planned budget to see where you might have overspent or underspent. It's important to do this because you can start to identify your spending patterns and areas that you can cut back, or reallocate, for the next year.
Maximize Retirement Contributions
Make sure you take full advantage of contributing to retirement accounts, whether it's your 401k or IRA (traditional or ROTH). Retirement contribution limits for 2025 are $23,500 for a 401k plan, with an additional $7,500 allowed for those 50 and older. Maximum contributions for an IRA (traditional or ROTH) are $7,000, with an additional $1,000 allowed if you're over 50.
Review Insurance Coverage
Review health, life, home, and auto insurance and they are updated to reflect any personal or financial changes in your life. Confirm that addresses, bank accounts, and payment methods are accurate and ready for the next year.
Conduct an Annual Investment Portfolio Review with Your Financial Advisor
When you review and rebalance your investment portfolio, you're also ensuring that the performance of your investments is still hitting your goals. Consider if you need to make any changes or diversify your investments to reduce risk. Because the market changes, an annual review ensures you’re always looking at your allocation, risk tolerance, and financial goals to make sure everything is still on track.
Plan for Upcoming Major Expenses
Consider any significant expenses that you anticipate in the coming year like home repairs, medical costs, or vacation. Start saving for those now to avoid the financial strain later. It is helpful to create a separate savings account for each major expense so that money is out of your regular checking account.
For more information and to connect with Trey Williams, stop by his Primerica office at 1509 South Smith Street, Suite 7 in Chattanooga.
Trey can also be reached through his website, www.primerica.com/trey_williamsiii, by calling 770-715-8199, or by emailing trey.williams@primerica.com.
A well-structured financial plan can help you achieve your goals, avoid unnecessary stress, and make the most of your hard-earned money.