7 Smart Financial Moves to Make Before the End of the Year

As the calendar winds down, there’s still time to strengthen your financial foundation and set yourself up for success. Taking action now can help you save money on taxes, organize your finances, and start the new year with confidence.

These practical steps require just a little effort but can make a big difference in your wallet and peace of mind.

1. Max Out Your Retirement Contributions

Before the clock strikes midnight on December 31st, consider boosting what you put into your retirement accounts. Contributing to a 401(k), traditional IRA, or Roth IRA isn’t just about preparing for the future—it’s a smart way to lower what you owe in taxes right now. Every dollar you add grows without being taxed immediately, giving your savings more power over time.

Even if you can only afford a small increase, it’s worth doing. That extra hundred or two hundred dollars might not seem huge today, but compound interest works magic over decades. Plus, some employers match contributions, which is basically free money you don’t want to leave on the table.

Check your account balances and contribution limits for the year. If you’re under 50, you can typically contribute up to a certain amount, and those over 50 get bonus catch-up contributions. Making this move now means you’ll thank yourself later when retirement rolls around.

2. Use Up Flexible Spending Accounts (FSAs)

That FSA money sitting in your account won’t stick around forever. Most employer-sponsored flexible spending accounts follow a use-it-or-lose-it rule, meaning any unused funds disappear when the year ends. Losing that money feels like throwing cash in the trash, so it’s time to spend what’s yours.

Schedule appointments you’ve been putting off—annual checkups, vision exams, or dental cleanings all qualify. Many people forget that FSAs also cover everyday items like bandages, pain relievers, contact lens solution, and even sunscreen. Stock your medicine cabinet while you still can.

Log into your FSA portal to see exactly how much is left. Some plans offer a grace period into January or let you carry over a small amount, but don’t count on it. Make a list of what you need and shop before December 31st to ensure you use every penny available.

3. Make Charitable Donations

Giving back feels good, and it can also lighten your tax burden when done strategically. Donations to qualified nonprofit organizations are tax-deductible, which means you get to help others while potentially reducing what you owe the government. It’s a win-win situation that benefits everyone involved.

Cash isn’t your only option for charitable giving. Donating gently used clothing, household items, or even old vehicles counts too—just make sure you get a receipt for your records. If you own stocks or other investments that have grown in value, donating those assets directly can provide extra tax advantages while supporting causes you care about.

Keep track of every contribution you make throughout the year. Gather receipts, confirmation emails, and bank statements showing your donations. When tax season arrives, you’ll be glad you stayed organized and can claim every eligible deduction available to you.

4. Review and Adjust Your Budget

Taking an honest look at where your money went this year can be eye-opening. You might discover you’re spending way more than expected on things that don’t really matter to you. Subscriptions you forgot about, impulse purchases, or dining out more than planned—these little leaks add up to big amounts over twelve months.

Grab your bank statements and credit card bills from the past few months. Categorize your spending into groups like housing, food, entertainment, and transportation. You’ll quickly spot patterns and areas where you can cut back without feeling deprived of things you actually enjoy.

Once you know where the money’s going, create a realistic plan for next year. Set spending limits for each category that match your actual lifestyle and goals. A budget isn’t about restricting yourself—it’s about making intentional choices with your money so you can afford what truly matters.

5. Check Your Credit Report

Your credit report holds powerful information that affects your financial life in countless ways. Errors on your report can drag down your score and cost you thousands in higher interest rates on loans and credit cards. The good news? You’re entitled to a free report from each of the three major credit bureaus every year, and checking won’t hurt your score.

Request your reports from Equifax, Experian, and TransUnion through the official website. Scan through each one carefully, looking for accounts you don’t recognize, incorrect balances, or payments marked late when you paid on time. Mistakes happen more often than you’d think, and disputing errors is your right.

Beyond catching errors, reviewing your report shows you exactly where you stand. You’ll see which factors are helping or hurting your score, giving you a clear roadmap for improvement. Better credit means better loan terms, lower insurance rates, and more financial opportunities down the road.

6. Harvest Tax Losses or Gains

If you have investments outside of retirement accounts, year-end is the perfect time for strategic moves. Tax-loss harvesting sounds complicated, but the concept is simple: selling investments that lost value can offset gains from your winners, potentially lowering your tax bill. This strategy turns a losing investment into a silver lining come tax time.

Review your portfolio’s performance over the past year. Identify which stocks, funds, or other assets are down from what you paid. Selling these at a loss doesn’t mean you’re giving up on investing—you can often reinvest in something similar right away, maintaining your market exposure while capturing the tax benefit.

On the flip side, if this was a low-income year for you, realizing gains might make sense. You could pay less tax on profits now than you would in a higher-earning year. Either way, these moves require planning, so consult with a tax professional if you’re unsure about the best approach.

7. Set Financial Goals for the New Year

Dreams without deadlines are just wishes, and the same goes for your money plans. Setting specific financial goals now gives you direction and motivation heading into January. Whether you want to build an emergency fund, save for a down payment, or finally tackle that credit card debt, putting numbers and dates on paper makes success far more likely.

Be realistic but ambitious with your targets. Instead of saying you want to save more money, decide you’ll save five thousand dollars by next December. Break that big goal into smaller monthly chunks—in this case, about four hundred dollars per month. Suddenly, an overwhelming target becomes a manageable monthly task.

Write your goals where you’ll see them regularly—on your phone, your mirror, or a vision board. Share them with someone who’ll hold you accountable. When you start the new year with clear objectives already in place, you won’t waste time figuring out what to do—you’ll already be taking action toward a stronger financial future.