The Year-End Financial Checklist (15 Personal Finance To-Do Items)

With yet another taxing year coming to a close, your first instinct may be to go into survival mode until you get a few holiday days off, indulge in a little self-medication that may or may not include egg nog, and then hibernate through the end of the year. While that sounds tempting and would certainly be justified, I’d also recommend taking on a little personal finance housekeeping first. There is no better time of year to get your financial life in order than the first few weeks of December. My self-practice and recommendation to you: calendar-in 1-to-2 hours of time now to go through the following year-end personal finance checklist that I’ve prepared and personally use. Rinse and repeat at the beginning of every December. Your future self will thank you in 2022 and beyond.




1. Spend “Use it or Lose it” FSA Funds

If your employer hasn’t temporarily enacted the COVID FSA carryover rule expansion, you could lose a sizable chunk of your contributed FSA funds at the end of the year. The FSA carryover rule allows up to $570 in un-spent carryover funds from 2021 to 2022. Congressionally approved changes took that further by permitting the capped carryover limit to be removed for 2021 and 2022, meaning that all contributed funds in 2021 have the potential to carry over to next year. This change was not mandatory, however, so if your employer did not implement the voluntary changes in its plan, you could still have the lower $570 carryover limit.

Check with your employer and then spend any un-spent use-it-or-lose-it funds that will vanish at the end of the year. It’s easier to spend FSA funds than it has been in a while, due to recent expansions of what is permitted. OTC medications and feminine hygiene menstrual care products are qualified medical expenses, retroactive to January 1, 2020 (and without an expiration date). This means that you can now use FSA (as well as HRA and HSA) funds to pay for these items. Telehealth and virtual mental health services are now qualified medical expenses too. Prescription glasses or contact lenses are an old but often overlooked qualified medical expense too.

personal finance to-do checklist

2. Make your Deductible Charitable Contribution

For tax deduction purposes, qualifying charitable contributions must be made by the end of the year for the respective tax year filing. With expanded standard deductions that were part of the tax reform that was rolled out a few years ago, itemized deductible charitable contributions were essentially wiped out for most taxpayers. That changed last year with the creation of a new $300 charitable donation tax deduction that could be claimed every charitable tax filer, even by non-itemizing filers who claim the standard deduction. And the $300 was expanded to $600 for 2021 for those with married filing jointly status.

3. Make ACA Marketplace Enrollment Changes & Sign Up for Next Year

For those who are enrolled in an ACA marketplace plan, your days are numbered on making changes to your plan. All but 7 states have an ACA open enrollment deadline of December 15 for plans to start on January 1, 2022. New this year – open enrollment is open until January 15 for plans to start February 1, 2022 (in most states). If you are currently enrolled in a plan, it’s always a good idea to re-shop during every open enrollment period because the prices for every plan change each year and new plans may be offered that could be a better deal than your current plan.

4. Top Off your Employer-Sponsored Retirement Plan Contributions

With most types of IRAs you have until the tax deadline to make your contribution, however, most types of employer-sponsored retirement plans (e.g. 401Ks, 403Bs, 457Bs, and government TSPs) have an employee and employer contribution deadline for the year of December 31st. The maximum 401K, 403B, 457B and TSP contribution for 2021 is $19,500 (increasing to $20,500 in 2022), but any little extra that you can contribute helps and will come with present (traditional) or future (Roth) tax benefits. If you want to make contributions to your account that could still take effect via payroll and make a difference this year, don’t hesitate on making the changes, as there will likely be a bit of lag time. If you have more than sufficient cashflow to cover your expenses this month, you may even be able to put 100% of your remaining paid income into your retirement plan. Note that you should check for specifics on what your employer allows, as some require equal periodic payments over the course of the year.




If you stand to reap a year-end bonus, this tip should be of even greater interest.

5. Make 529 Plan Contributions

If you have a 529 plan for yourself or for your children, 6 states (GA, IA, MS, OK, SC, and WI) have lenient April deadlines (in the subsequent year) for their 529 plans, but all other states require annual contributions to be made by the end of the calendar year (December 31). 529 Plan contributions are tax advantaged (some states allow deductions, but they are similar to Roth IRAs and are not tax deductible at the federal level).

6. Use Up & Refresh Expiring Credit Card & Travel Rewards Points and Benefits

If you have ever accidentally lost hard-earned credit card or travel rewards due to expiration deadlines, you know how much it can sting. Some credit card and travel rewards programs have expiration dates that are associated with the dates you earned the reward or signed up for the program, but others will go by the calendar year instead. I created a spreadsheet for myself that lists every rewards program I am, rewards that I’ve earned, and expiration dates. I’d suggest tracking the following:

  • Point/mile expiration dates (for account inactivity, other)
  • Certificate reward expiration dates (e.g. flights, hotel nights)
  • Unused annual perks (e.g. credits for certain expenses)

If you’re looking for new travel rewards to take advantage of, take a peek at the following:

  • Airline rewards cards: Gold Delta SkyMiles AmEx, United Explorer, Capital One Venture Rewards, Chase Sapphire Preferred
  • Hotel rewards cards: IHG Premier, Marriott Bonvoy Boundlesss, Hilton Honors AmEx, Capital One Venture Rewards, Chase Sapphire Preferred
  • General travel rewards cards: Chase Sapphire Preferred, Capital One Venture Rewards, Wells Fargo Propel

7. Review your Tax Withholding Situation

With tax brackets and standard deductions changing every year with inflation and your income level also likely changing, this is the time of year to review your income and make any tax withholding changes for the following year. Grab your most recent payroll statement and use the IRS W-4 form to calculate any needed changes for next year before submitting to your employer.

8. Re-shop Your Insurance Policies

Many insurers set their rates for the subsequent year in November/December, so this is a good time of year to re-shop your insurance to see if your insurance needs have changed and make sure that you’re still getting the best possible rate for what you need. Insurance companies will often lure new customers in with discounted teaser rates for the first year and then quickly jack up rates in subsequent years. The longer you stay with an insurer, the more likely it is that you will find a better rate elsewhere.

9. Review your Spending Over the Last 12 Months and Trim the Fat

I’m not a fan of arbitrarily pulling a budget number out of the sky and setting that as the monthly limit for what you will spend. I think a more effective technique is to track and categorize your spending with a spreadsheet, figure out where the fat is, and then trim it. Take particular interest in recurring expenses like subscription services and utilities (e.g. streaming, internet, cell phone, cable, insurance, memberships, etc.).

10. Set Financial Goals for Next Year

With a full year rounding out and coming into focus, there really isn’t a better time to set and document some short and long-term saving and spending goals. Taking a few minutes to do this during time off has always been enjoyable to me and given me some objectives that I could hold myself accountable to later on. If you aren’t doing this, then what is the point of spending over half of your week working for the man (or woman)?

Additional To-Do Items

I won’t go into full details here, but it’s also a good time of year to do the following:

11. Rebalance investments

12. Tax loss harvesting in taxable investment accounts

13. Negotiate better interest rates on your debt

14. Top off HSA contributions for the year

15. Review your credit reports and remedy any errors

Personal Finance To-Do Checklist Discussion:

  1. Which of the above items will you be focused on in the next few weeks?
  2. What year-end financial to-do items are on your list that I didn’t highlight above?

2 Comments

  1. RNT

Join 10,000+ readers & get new articles by email, for free.

Thank you for subscribing!

Oops... Please try again.