Year-End Financial Checklist: Must-do Tasks for Every December

It's normal to make "New Year's Resolutions" for things that make you feel good, like "lose 10 pounds", "max my annual Fitness Test", "do 30 pull-ups/100 push-ups", and other measurable goals. For resolutions like these, we easily come up with training plans, and most of the time accomplish our goals. Sometimes we totally smash them.

Yet when it comes to financial goals, we aren't the same: we don't set specific goals and make plans, but instead come up with generic "hopes and dreams" like "strike it rich" that don't translate into any sort of actionable goal or plan. Yet somehow we act surprised when we then fail to achieve what we want . . .

The key to financial success to is to set goals and make plans -- plans you can stick to -- and then make sure we follow those plans and measure our successes (and failures). As the year winds down, it’s time to pause and take a good look at your financial health, and then make goals and plans for 2025. A year-end financial review isn’t just about tying up loose ends—it’s an opportunity to evaluate where you’ve been, refine your strategies, and set yourself up for a strong year ahead.

In this post, we’ll guide you through four essential areas of focus: Savings and Budgeting, Financial
Audit, Tax Strategy, and Future Planning. Within each of these four areas you'll find several specific actionable steps to take IMMEDIATELY to best prepare yourself for 2025, and beyond. Just remember that some of these actions are tied to the calendar, and you can't wait until 2025 to make the most of them!

Savings and Budgeting Tasks

1. Review Your Savings Balances

Check your Emergency Savings Fund (ESF) to ensure it can cover your "life emergencies." Remember: this has nothing to do with the traditional 3-6 month's of expenses, especially if you're in the military. Take a look at all the possible expenses that could come up (new roof, new car, medical expenses, etc.), and if you don't have enough savings to cover it, come up with a plan to boost your ESF balance.

If you used your ESF this year, make sure you've brought it back to the level you need.

2. Evaluate Retirement Contributions and Adjust Rates

Each year you get a pay raise in the military, but that doesn't mean you want it all to go to your retirement savings. In fact, you set a savings plan for retirement based on a set dollar amount to reach your goals. So when your pay goes up in dollars, you need to lower your TSP contribution percentage. For the new year, make sure that you adjust your TSP contribution percentage to keep your dollars constant.

3. Review and Adjust Your Budget

This is when you need to review your budget and your spending from the past year. Did you overspend in certain categories? Are there areas where you can cut back? Use insights from 2024 to adjust your budget for the new year and allocate more toward savings or debt repayment.

4. Analyze Debt Payoff Progress

Review your outstanding debts, like credit cards, car loans, or student loans. Are you on track with your payoff plan? Don't just stop with the outstanding balance, but take a look at how much of your debt payments in 2024 went to principal pay-down, and how much went to interest. If you're still paying more towards interest, consider adjusting your payments to increase debt servicing and get ahead of the interest and the Debt Trap. Overall, make sure to review your strategy and update any payoff plans high-interest debts first (debt avalanche method) or small balances for psychological wins (debt snowball method).

5. Evaluate Emergency Preparedness

Beyond your savings, review your insurance policies—health, auto, home, and life—to ensure you’re adequately covered. Update them if you’ve experienced major life changes, like marriage, divorce, or buying a home. For the most part, Servicemembers Group Life Insurance (SGLI) will only be enough if you're single and don't own a home: if in 2024 you bought a house, got married, or did both, you're going to need to purchase more Life Insurance and other policies to make sure you're protected.

6. Review Spending on Recurring Bills

Comb through your subscriptions and recurring expenses. Are you still using all those streaming services or memberships? Cancel what you don’t need and negotiate lower rates for utilities or phone plans. If you need to increase Emergency Savings Fund, retirement, or insurance investments, you can almost always afford those additional investments and insurance premiums by cutting back on a subscription or two.'

Financial Audit Tasks

7. Check Your Credit Reports

Request your free annual credit reports from AnnualCreditReport.com. Look for errors, outdated information, or signs of fraud. If you find issues, dispute them immediately. You can find instructions on how to dispute or appeal any issues by navigating to the websites for the three major reporting agencies: Equifax, Experian, and TransUnion.

8. Audit Your Investment Portfolio

Review your asset allocation to ensure it aligns with your goals and risk tolerance. Has the year’s market performance thrown your portfolio out of balance? If so, rebalance it to maintain diversification and optimize returns. For example, if you are trying to manage your investments as 90% stocks and 10% crypto, and your crypto portfolio blew up and is now 20% of your investments, consider selling half of your crypto and using it to buy more stock. This will reset you to your 90:10 strategy.

9. Calculate Your Net Worth

Why not take some time at the end of the year to celebrate what you've accomplished instead of only just critiquing what you've done? Add up your assets (cash, investments, property) and subtract your liabilities (debts). This number represents your net worth—a snapshot of your financial health. Compare it to previous years to measure progress. This is a super-important step: if your net worth has gone up, take a little bit of cash from your savings and buy yourself something nice to celebrate! What's the point of saving and investing if you can't enjoy it?

10. Update Financial Documents

Life changes often require updates to your will, trust, or power of attorney. Review these documents to ensure they reflect your current wishes and circumstances. Also, double-check beneficiary designations on accounts like Thrift Savings Plan (TSP) and life insurance. Imagine how embarrassing it will be if your ex-partner is still on your TSP beneficiary page and they get all your money, leaving your newly discovered "love-of-my-life" with nothing?!?!

11. Update Insurance Policies

As life changes, your insurance needs change. It's not just adding spouses, children, or new cars. Changes to your life insurance needs are probably the biggest -- and most often overlooked. If you became a homeowner this year, you may need $500,000 in additional insurance coverage. If you became a mother or father, you probably need at least $150,000-200,000 more. It's important to update your coverages each year so you don't leave your loved ones and family left holding the bill when you're gone.

Tax Strategies

12. Plan for Tax-Efficient Investing

Explore strategies like tax-loss harvesting to offset gains and reduce your tax bill. For example, each year you can claim up to $3,000 in losses and deduct those from your taxable income from stock picks or other investments that didn't work out how you hoped. Don't hold onto them until the new year: SELL NOW!

If you’ve had a high-income year thanks to a Continuation Pay or reenlistment bonus, consider making Traditional TSP, 401(k), and IRA contributions in excess of your normal plan to help reduce your taxable income for 2024.

If you had a low-income year thanks to a deployment, consider converting funds from a Traditional TSP, 401(k), or IRA to a Roth IRA to pay taxes now and enjoy tax-free growth later.

13. Review Tax-Deductible Contributions and Expenses

In the military, there's really no reason to ever make a contribution to an IRA: your TSP limits are so high ($23,000) that you should never max it out. And also you aren't even eligible for a Health Savings Account (HSA), so you don't need to think about it. As for the recently offered. The military offers Flexible Spending Accounts (FSA) to help pay for child care expenses -- but those aren't tax-advantaged, so you shouldn't be contributing to those anyway. 

So at the end of the year, you should really only be checking to make sure you: 1. aren't wasting money contributing to an IRA, 2. aren't wasting money contributing to an HSA, and 3. aren't wasting money contributing to an FSA.

If you're retired, not much changes; if you separate without a retirement and without TRICARE For Life, you are eligible for an HSA and should start one immediately; if you separate without retirement and without a pension, you probably need an IRA and should open one immediately.

Planning for the Future

14. Set New Savings Goals

What do you want to accomplish in the next year? What have you accomplished in the past year? Now is the time to adjust savings rates and open new accounts as needed. For example, if you saved up enough to fill your Emergency Savings Fund goal of $20,000 but are behind in saving up for a new car, update your savings rates to zero-out your ESF contributions and max out your New Car Fund.

15. Set Financial Goals for the New Year

Are you happy with what you achieved in 2024 financially? Are you disappointed by what you didn't? Now is the time to set goals for 2025 -- and remember, they can't be wishy-washy and dreamy: make them SMART. Your goals need to be Specific (save $10,000 for a new car), Measurable (save $833 per month), Attainable (you can save $10,000 in 1 year from $833 per month), Realistic (you make enough money to save $833 per month), and Time-Based (12 months, not "forever" or "whenever").

16. Plan for Upcoming Expenses

Anticipate large expenses like tuition, weddings, or home repairs. Create a savings plan to fund these costs without relying on credit. This is one of the most important tasks you can complete each year, as most American families are in debt not because they planned to be there, but because they were ambushed by unexpected expenses. By planning and saving in advance -- from new braces to a kid to a family Christmas vacation to Disney -- you can ensure you end 2025 in good financial standing, not in debt.

17. Review and Update Your Financial Plan

With all these new numbers, it's time to update your Personal Financial Plan (PFP) and update all of your automatic transfers and other numbers. Logging into and updating all your accounts will take less time than it takes to watch half a game of NFL football or the complete How the Grinch Stole Christmas. With the TV on in the background, just go down this checklist, login, and make your changes. Then sit back and bask in the sweet smell of victory and glow of financial success that will carry you all the way to 2026!

Conclusion

Completing a year-end financial checkup may take some time, but it’s worth the effort. By reviewing your finances, updating your plans, and setting new goals, you’ll set yourself up for success in the coming year.

Ready to start the year strong? Download our free financial review checklist and book a session with our financial coach to create a customized strategy for your goals. Make 2024 your best financial year yet!