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3 Financial Things To Do Before The End Of The Year

financial moves before the end of the yearIt’s hard to believe we only have a few short weeks until the end of the year. It’s down to the wire on getting our financial houses in place before New Year’s Day. Hopefully everyone can take a few minutes away from eggnog and holiday festivities to make sure we’ve made the best choices with our money. Here are three things I believe are worth doing before the end of the year.

Flex Plan or a Health Savings Account for Health Care Spending

Flexible spending plans are a great way pay for health care expenses pre-tax for a great discount. They used to be use it or lose it, meaning if you didn’t use all of your allotted money by the end of the year, it went back to your employer. In 2013, Congress passed a law that says you can roll over $500 into the next year if you procrastinated or didn’t need to use all of your flex money during the year.

Health savings accounts are a totally different animal.You don’t have to use money by the end of the year. In fact, you can let it grow until retirement if you want. Some people, self included, think HSA’s are the best retirement plans around.

The triple tax advantages of a HSA are really a great use of money, and I highly recommend taking advantage if you are eligible for one. You have until April 15, 2015 to max out your HSA for 2014, so there is no rush if you need to put your money elsewhere for this year. However, if you haven’t set up your HSA account, do it before the end of the year, even if you can’t contribute much. This can be as simple as going to a local bank or setting up an account online with a company like HSA Administrators.

To confuse people even more about HSA’s and flex plans, this year Congress passed a new law that makes you ineligible for a health savings account in 2015 if you roll over any money from a flex savings health spending account. So, if you were planning on using a HSA at all next year, do not roll over your flex money! Make those appointments now to use it up by the end of the year.

┬áCancel Things You Aren’t Using

This is the perfect time to look at all the stuff you have a monthly bill for and decide if you are taking full advantage. I would bet that many of you are so busy right now that you aren’t watching much TV. I bet lots of you are skipping the gym this month. There are probably subscriptions that aren’t getting used right now either.

Why not cancel them, especially if you know you’ll have higher than normal spending this month due to the holidays? Even if it means buying a Roku or new TV so you can cancel paid TV, that’s probably a good move. Over the course of a year, you’ll make that money back in what you save on cable bills. There is almost nothing you can’t watch by using Netflix, Hulu, the library, online viewing, and an antenna. Even if there is a program or two you’ll miss, is it worth the extra $50 to $100 a month?

I’m all about fitness, but paying $50-$100 a month for a gym membership you rarely use is not a great way to grow your health or wealth. Why not cancel and try working out at home or at a YMCA or community rec center? It might not have a juice bar or fancy sauna, but the rec center is usually a great deal for what you get.

Make an Investing Plan

Hopefully you were able to hit your investing goals for this year, but if you didn’t, this is the time to change. Next year, maxing out a 401K for someone under age 55 would take $1500 a month. I know it sounds like a lot of money at first, but it’s very doable for most people.

If you look at taxes, a person in a 25% tax bracket would save $4,500 a year in taxes by maxing out a 401K. I don’t know about you, but I’d much rather keep my money than give it to the government. Considering tax savings, you really are only out $1124 a month, which again sounds like a chunk of change, but how many of you have monthly expenses that look like this?

  • Car payment: $350
  • Cable or Satellite TV: $100
  • Groceries: $600
  • Eating Out: $100
  • Shopping: $100
  • Starbucks, Happy Hour, Lottery Tickets, Lawn Service, Credit Card Interest, Insert Vice of Choice: ?????

I really don’t care how you spend your money. That’s your choice, but are you using excuses as to why you can’t afford to max out your retirement plan or HSA? If you only make $20,000 a year, you probably can’t afford it. If you make $60,000 a year, you probably can. Think about reducing expenses, and if you still don’t have enough, find a way to make more money.

I did not max out my retirement plan for many years because I spent money in foolish ways. I try not to regret because all those years taught me lots of valuable lessons. Hopefully you can use my mistakes so you won’t have to make your own.

I’m sure there are many, many more financial things to think about for year end and next year, but hopefully today, you’ll think about getting these three things done.

What is your priority before the end of the year? Are you increasing your retirement contributions next year?


Image: freedigitalphotos.net/krisna arts

About Kim Parr

Kim Parr is a private practice optometrist, freelance writer, and personal financial blogger. You can follow her journey to 20/20 financial vision at Eyes on the Dollar.


  1. We cancelled cable in October and have barely missed it! We are saving over $100 per month by using Prime, Hulu, and a Mohu leaf instead. It’s one of the best money decisions we made this year!

  2. I did all of these things already. Well, except maybe for cancelling things. I am going to continue maxing out my SEP and Roth IRAs next year. Can’t think of a good reason not to.

    • Maybe to become a shiftless layabout and go on the road to follow Pearl Jam? No, there really is no reason not to max out as much as you can. I think shiftless layaboutism is probably overrated anyway.

  3. Like Holly, we’ve done most of these things already save for maybe canceling a thing or two. Our main priority before the end of the year is FINALLY getting 529’s opened for the kids and moving over their custodial accounts into them and setting aside enough so we can max out our Roth IRAs come January 2nd so we start working on maxing out our SEP’s right away.

    • I know the feeling. If you don’t have it mapped out, it’s easy to get three or four months into the year and realize you haven’t been putting in the contributions. That is one thing I kind of miss from having an employer do it for me.

  4. The end of the year is always a great year to review all expenses and get that budget / spending plan into tip top shape for the new year!

  5. I’m plugging a few holes like getting rid of my safety deposit box since I don’t really need it anymore. As far as retirement it’s going to be a tough call that will come down to the last minute. Right now I have about half of what I can max in a capitol one account, however, because of my crappy income this year it might be best served right now as an emergency fund in case things don’t turn around quickly. If by april they get way better I can contribute, but if not, I can’t.

  6. We actually spent most of this year canceling things so we are in good shape. Something I tell my clients is to look at 529 savings for kids if they have them an they are in states where they will get a tax deduction for the contributions.

  7. The investing plan is so important. Many times you just don’t think it is possible but once you start doing it and seeing your money grow faster than ever you wish you had done it earlier in life. Even when things are going great its always good to review things and see what you could do better. All that does is get you to your long term goals faster.

  8. Yes, let’s make it clear for every dollar you contribute to your 401k that’s a quarter less you give to the government. So max it out as much as you can, love the idea. Don’t know if I can go without groceries though, a boys gotta eat. Great list though.

  9. Great suggestions. I am working on canceling a few things that I haven’t been getting my money’s worth out of, one of them being TV service. Hopefully I can do so without it costing me a fortune…

  10. Great tips, Kim. I can’t believe how fast 2014 is winding down. This is definitely a great time to stock and make sure you start 2015 in a solid place. I know that I’m answering lots of questions on anything clients should do financially before year-end and I bet you’re getting lots of last-minute appointments so people can use up their money in their flex accounts. ­čÖé

    • You would not believe the last minute rush that always comes the week after Christmas. I am always amazed at how many people wait until the very last minute then get mad if they can’t get what they want.

  11. Excellent tips. It’s hard to believe 2014 is almost over. Canceling things that you don’t need is very important. How often do you see people paying $100 for cable subscription yet they don’t watch much TV at all?

    • We did that for years until finally cutting the cord. I’m not sure why it took so long. I guess familiar is comforting sometimes.

  12. Canceling cable and gym memberships are a great idea! We don’t have either, but we manage to do just fine. There are so many great alternatives to both that they’re hardly worth paying for. We maxed out our 401Ks in 2014 and we’ll do the same in 2015–I think we’ll mostly stay the course in the new year, but, I want to pull our full year-end financials before we decide what to do.

  13. great tips. It’s helpful for me. Thank for sharing nice article

  14. We are currently writing checks for our annual donations. Hubby is already beginning on our taxes…ordering preparation software etc. One thing to think about is estimated tax payments. The final quarter is due in January, however, if you think your income is higher this year that it probably will be next year, you can accelerate your quarterly payment and make it in December. This way you can deduct it on your 2014 taxes. By the way, this estimated payment only works for states that have state income tax. It won’t work on your federal taxes since federal taxes aren’t deductible…don’t we wish!

  15. We are definitely changing our retirement contributions for 2015. Before we found our frugal ways, we contributed just enough to get the maximum employer match. Then when we started our path to FIRE, I was worried about putting money into age-specific accounts since we wanted to use those funds long before we reached retirement age. But over the last year we have done lots of reading to understand how we can get it all… tax-deferred and access earlier. So, 401(k) accounts will get their full $36,000 this year.

    • I think there are plenty of ways to have it all if you work hard enough and are really smart about how you invest. Congrats on finding the right path.

  16. Excellent post as always, Kim, and I really appreciate the link to my HSA post! I know you and I are both huge HSA geeks. You raise some good points and the biggest things I’m trying to do by year-end is prepare for taxes. With the rental unit, the blog, a couple freelance gigs, and winning a couple big giveaways I really need to be on the ball so I don’t end up owing the IRS $7k like I did last year.

    • I guess that would be a downside of winning giveaways, although one I’d gladly take. I am very glad to know there are other HSA geeks like me out there.

  17. This year really has flown by. These are great tips to remember, especially the FSA one so many people don’t use all of their money. Go to Kim’s office and get some glasses and contacts!

  18. If you have any business expenses for next year, you can pre-pay and save taxes.

  19. I’m always intrigued by cutting cable but the hubby loves ESPN … anyone know how to watch ESPN without cable?! We were lucky enough to join a gym when they first opened and pay $5/month each. We definitely get our money’s worth;0)

    You are prompting me to check with the hubby to make sure we are maxed out on the 401K. I believe we are. We do need to work on our Roth IRA’s.

    Thank you for the thought provoking post!

  20. Great ideas! I would add setting up a system to automate your finance.

  21. Thank you for sharing those great tips.

    I cancelled home newspaper delivery about four weeks ago.

    I used to enjoy reading the paper for breakfast everyday, but now I just read the news on the internet.

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