Review Your End-of-Year Finances To Plan for 2023

A yearly financial checklist can help with planning and saving.

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Year-end is the perfect time to take stock of what’s happened to your financial accounts over the past 12 months. And it’s an opportunity to plan ahead.

Before you flip the page on the calendar, here are six things you can do to improve your overall financial health.

1. Opt for a cash-out refinance of your home.

If you have enough equity in your home, you can replace your current mortgage with a new one for more than you owe and take the difference in cash. You can then use that cash to pay for holiday giftstravel and paying off your credit card debt, which often has a higher interest rate.

2. Check on your life, auto and home insurance policies.

Do you need to change the beneficiary on your life insurance? Have you made any major renovations to your home? Have you made any changes that would affect your auto insurance, such as going from commuting to an office every day to working from home?

Also, 2022 was a busy year for job promotions and career changes. Be sure to review your insurance policies to account for new income expectations. 

3. Make an extra house payment and car payment.

If you have money available, making extra home and car payments at the end of each year is one way to significantly shorten the payoff time of your loan.

4. Contribute to your IRA and 401(k).

Decrease your tax burden by maximizing payments to your 401(k) through your employer, to your personal IRA or to both. You have until Jan. 31 to contribute to your 401(k) and until April 18 or the following year’s official Tax Day to contribute to your IRA. If you’re 72 or older, you need to take the required minimum distribution from your IRA by the end of the year. 

5. Resolve your FSA.

Most flexible spending accounts (FSAs), which are run through your employer’s HR department, need to be resolved—in terms of money spent and receipts entered—by the end of the calendar year. 

A health savings account (HSA) doesn’t have to be paid down each year, but it’s good to check it to make sure everything is accurate. 

6. Consider a CD, a high-yield savings account or a money market account.

After you have your minimum distribution and tax rebate, consider placing those funds into a certificate of deposit(CD). With a CD, you’re essentially locking in the savings for six months or a year, earning interest at a higher rate than you would with a traditional savings account. As interest rates rise, high-yield savings accounts and money market accounts also become more attractive options. 

To make it even easier to get your finances in shape, follow this downloadable checklist.

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