Financial Checkllist for the End of the Year

Financial Checklist For The End Of The Year

2020 has been a crazy year for many of us because of COVID-19 and the election. I am sure you, like me, are happy the year is almost over. My favorite part of the year is the little lull that happens after Christmas. I have a side business that is super busy until the holidays, and then all is quiet until late-January. I relish this downtime because it is a perfect opportunity to reflect on the past year, personally and financially. After a busy holiday season, it offers me the time to get my financial house in order. I catch up on bookkeeping, collect my financial information for tax season, and set goals for the next year. I have an end of the year financial checklist I run through. You should too! It is essential after the uncertainty of 2020.


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What to Review for Your Financial Checklist for End of the Year?

Start with the Basics

Smart Budget

Review and update your budget. Has anything changed in your life that required a change in spending?  If you have no idea of how much you are currently spending, the start of the New Year is a great time to get a handle on it. There are many tools for tracking your spending. Even a simple notebook will suffice. Any month you spend less than budgeted, transfer the difference into savings or pay down debt.


A smart budget will include all your debt: credit cards, mortgage, car loans, student loans, etc. Make 2021 the year you pay down your debt, which will free up money for investment. Consider what kind of approach will work best for tackling your debt. Review your budget to determine how much money you can apply above the minimum payments. Then, set a deadline for paying off your debts one by one. Even adding a small amount can help. As you pay off debts, apply that “extra” money towards another account or put it in your emergency fund. I was able to pay off student loans early by having a side gig and applying the money that wasn’t part of my budget towards the loans.

Emergency Fund

Most of 2020 has felt like an emergency! Although we were fortunate to stay employed, this year has made us examine your emergency fund. We chose to increase the amount of money we had in it. You should have at least six months of expenses set aside in case of a loss of income. Unemployment payments usually don’t start right away. You should have enough money set aside to deal with a financial emergency or several months without pay. If you had to tap into your emergency fund this year, add that money back to the account in 2021.

Credit Report

Have you checked your credit report lately? If you answered no, check to make sure that everything’s how it should be. Checking your report is a great way to spot identity theft or errors. Errors do happen! An accurate report is essential when applying for a loan, renting an apartment, or even changing insurance companies. Good credit was the reason we saved so much money on our insurance. You can get a free credit report annually at

Check Your Healthcare Benefits

Healthcare Benefits

Open enrollment for most plans is typically in December. Be sure to review your current selections. Are you keeping them for the next year, or do you need to make a change? Did the plan meet your needs this year, or did you find it lacking? It helps to go through your statements to see how you used your benefits. Were the out-of-pocket expenses more than you expected? Our family ends up paying more out-of-pocket in the first half of the year because of our deductibles. We counter that by using a Health Savings Account (HSA) through my husband’s employer.

Many plans and employers offer Flexible Spending Accounts (FSA) and Health Savings Accounts (HSA) that provide tax-free benefits. Some employers contribute to them as well. An FSA is a tax-free account to which you can contribute money to go towards deductibles and services that your health care doesn’t cover. Often you have to spend the money in the current calendar year, and it cannot be rolled over to the next year. You use it or lose it!

Other plans offer an HSA if you have a high deductible health insurance plan. Contributions are generally tax-deductible, and withdrawals are tax-free when used to pay for qualified medical expenses. Funds can be rolled over to the next year and don’t have to be used in the current year. It allows you to grow the money over time until you need it.

Review Your Insurance Policies

Auto and Homeowners’ Insurance

Have you looked at your policies lately? It is crucial to make sure your policies cover your property’s value, especially if your home has increased in value in the time you have owned it. Make sure you understand any limits. Do your deductibles make sense for your situation? Do you have enough coverage? Take this opportunity to ask your insurance agent to shop your policy around. Our family did this and saved $3,000 between our home and auto insurance, despite having two teen drivers! Changing companies and our strong credit score made this possible.

Life Insurance Policies

When I was younger and did not work outside of the home, I had a term life insurance policy to cover the costs of childcare if I died. My husband’s term life insurance policy at the time was intended to replace his salary and pay off the mortgage. He also had life insurance through his workplace. Our situation has changed as the kids grew up, I returned to work, and we paid off the mortgage. We view life insurance as an asset to go towards the kids’ college costs or the surviving spouse’s retirement. We are close to the end of our term policies and supplement them with life insurance through our employers and professional organizations. When we reach the end of our term policies, we will re-evaluate our insurance needs. Some things to consider are pricing, beneficiaries, and payout amounts. Don’t be afraid to contact an insurance agent to help you evaluate your situation.

Beneficiaries and Account Information

Your retirement and life insurance accounts must have the correct beneficiaries listed to ensure your assets will go to the people you intended. It is all too common to leave an ex-spouse or deceased relative on a plan. You need to update your beneficiaries if there has been a change, such as marriage or divorce. Review your contact information, including phone and email addresses, which can change frequently. Government unclaimed money websites are full of listings for unclaimed policies and accounts because of a lack of current information. We have found relatives’ names on the unclaimed money lists!

Don’t Forget Your Retirement Plans


The last date to make additional payments to a 401(k) is December 31st. Your company may offer a matching 401(k) contribution as part of your employee benefits package. This is free money to you, so it’s best to contribute the maximum amount. Matching contributions vary from company to company, so it’s best to check with your human resources department to determine how much you need to contribute. Max it out! Otherwise, you are leaving money on the table. If you get a regular pay raise, consider adding it to your 401(k). You won’t even miss the extra money from your paychecks. You can reduce your adjusted gross income by contributing up to $19,500 to a 401(k) for 2020.  If you’re 50 or older, you can also take advantage of catch-up contributions and contribute an extra $6,500 for a total of $26,000.


If you do not have a 401(k) or retirement plan at work, you can still reduce your taxable income by contributing to a Traditional IRA or a Roth IRA.  You can contribute a maximum of $6,000 per year, and if you are 50 or older can contribute an additional $1,000 catch-up amount for a total of $7,000. Contributing to a Roth IRA won’t lower your tax bill, but it will allow any funds you invest to grow tax-deferred and be withdrawn tax-free if you follow all the rules and withdraw funds when you are old enough to retire. We had a mix of 401(k) from different employers over the years and consolidated them after talking to our financial advisor.

It’s Been A Tough Year – Think About Others

Charitable Donations

If you plan to itemize deductions and want to lower your tax bill this year by giving to charity, do so before the end of the year. Thinking ahead about next year’s charitable gifts may allow for a larger tax deduction this year if you pay out the money out this year. Only the amount you contribute to charity this year is deductible on this year’s tax return. Pledges don’t count for this year! If you make a qualified charitable distribution from your IRA, you may reduce the tax owed amount.

The Part Nobody Likes


No one likes to think about their will. However, the end of the year is the perfect opportunity to ensure it still represents your wishes. Let your loved ones and executor know where you keep your will. If you don’t have a will, get one as soon as possible. Do you really want your estate tied up in probate? If you haven’t looked at your will (like us!) since it was first drawn up, it’s time to review it.

Health Care Directives

Health care directives come in the form of a living will and power of attorney for health care. They allow you to establish your wishes for health care and designate a person to make any necessary decisions for you. This can save your family from many difficult choices and guessing what your wishes would have been. It’s a good idea to let loved ones know you have done this and keep it with your will.

Life Events

Plan for life events, if possible, in your budget. A job change, home or car purchase, surgery, or other life events (children’s college expenses, weddings, etc.) requires planning. We made automatic payments to our children’s 529 accounts part of our budget from the start.

Too Much to Handle?

Financial Advisor

Is this financial checklist for end of the year stressing you out? Does managing your finances seem like too much to handle? Add finding a financial advisor to your list. If you don’t have a financial advisor yet, now is a good time. Some things to consider when interviewing an advisor:  how do they like to communicate, what services are offered, who is their typical client, and overall investment strategy. It’s important to understand whether they are a fee-only or a fee-based advisor. Fee-only advisors base fees on their services, while fee-based advisors can earn commissions from selling certain investment products. Using an advisor doesn’t mean you can ignore your finances. The shared load will feel lighter. Ask your family, friends, and business associates for recommendations. My husband and I were fortunate we liked his father’s fee-based financial advisor, who he had been with for years.

Final Thoughts on Financial Checklist for End of the Year

This financial checklist for end of the year is long and may seem overwhelming. Not all of the items on this checklist will apply to you. It would be best to speak with a financial advisor, CPA/tax professional, attorney, or another financial professional if you have concerns or are not sure what to do. The end of the year is a good time though to put your financial house in order and a checklist for end of the year is a good place to start.

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Christine Seaver is a freelance writer that writes about personal finance, budgeting, and debt. She is a frequent contributor at Christine works as an office manager by day and a cookie baker at night. She lives in Massachusetts with her family.

4 thoughts on “Financial Checklist For The End Of The Year

  1. I have little bit knowledge regarding financial checklist because I am new to on this profession. After reading your article I have learnt many things regarding financial checklist plan and strategy which would be really beneficial for me to keep tract of expense but also help take sound financial decision in future. I am really thankful to you for sharing this insight thought with us!

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