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Make These 4 Financial Moves Before the New Year

Woman Making Holiday List

The winter holidays are upon us—and while there still may be gifts to buy and a few loose ends to tie up at work, there are also important year-end financial moves well worth making.

Here are four things you can do now to improve your financial situation and hit the ground running in the New Year.

  1. Increase your retirement savings. If you have an employer-sponsored retirement savings plan, check to see if you still have time to make a year-end contribution for this year. Looking ahead, double-check whether you increased your savings for next year. Some plans automatically escalate your savings yearly (often by one percent). Even if your plan has an auto-increase feature, consider whether you can increase your savings even more.

    If you save through an IRA, figure out how much you saved in 2019—and develop a plan to put aside more in the coming year, ideally by making regular contributions. The IRS gives you until April 15 of next year to fund an IRA—but the sooner you start putting money into an IRA, the more time your money has to work for you.

    The IRS provides information on how much you can contributee to an IRA or a workplace retirement plan—and, if circumstances allow, you can always contribute to both.
    Are you saving the maximum amount you can?
    Use our Save the Max calculator to find out.
  1. Automate your way to a robust emergency fund. Before year end, work with your bank, credit union or investment firm to automatically put money aside in an account dedicated specifically for emergencies. You can often do this online in just a few minutes. A good target to shoot for is $2,000, or just over $160 per month. Everyone should have an emergency fund.
  1. Get your free credit report. Check out, the only resource authorized by federal law to provide free credit reports from each of the three major credit bureaus—Equifax, TransUnion and Experian. You can request a report from each of the credit bureaus—for free—once every 12 months. If you already received your report—and reviewed it—take a few minutes to reacquaint yourself with how much each credit card you have is charging you in interest, and the balances you are carrying on each card. Consider paying down, or paying off, the cards with the highest interest rates first.
  1. Put your bonus to work. If you are fortunate enough to receive a year-end bonus—take some time to develop a strategy for how to make the most of it. One option might be to save some of the money for education, perhaps by starting, or adding to, a 529 college savings plan. Or you might want to use the winter holidays to learn more about investing outside of a retirement plan. Here’s how you get started.

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