I'm a sucker for New Year's resolutions, but before you can properly look forward and set new goals, you need to look back and assess where you are in this moment. The end of the year is always a good time to reflect, and your personal finances are no exception. With only a few days left of this year, you still have time to make the most of 2024 and set yourself up for financial success in 2025.
Don’t lose out on flexible spending dollars
If you have a Flexible Spending Account (FSA), time is running out to use up your remaining balance. Check in with your employer’s rules regarding any balance remaining on Dec. 31 this year so you aren’t left forfeiting your hard-earned funds.
If you’re unlikely to pack out the rest of your year with doctor’s appointments—either because everywhere is booked months in advance or because that sounds dreadful—fear not. You can spend your remaining FSA funds on other qualifying healthcare costs. You can use FSA funds to upgrade your prescription eyeglasses or buy more contact lenses. You could also hit your local pharmacy and stock up on certain FSA-eligible over-the-counter products, like first aid supplies, popular cold medicines, and even sunscreen. You can find a complete list at the FSA store here.
The employee health FSA contribution limits are increasing from $3,200 to $3,300 in 2025.
Max out your retirement contributions
If you have the means, you should set yourself up now to max out your retirement contributions. For 2025, 401(k) participants are able to contribute as much as $23,500. For IRAs—traditional and Roth—you can max out at $7,000. If you are 50 or older, you can make an additional $1,000 contribution totaling $8,000. These contribution limits apply to the grand total contributions you make each year to all your traditional and Roth IRAs.
Also starting in 2025, employees aged 60 to 63 will be able to make larger catch-up contributions to their 401(k) plans, with new limits set at either $10,000 annually or 150% of the standard catch-up contribution limit—whichever amount is greater.
Remember, the most effective retirement strategy is to contribute consistently and let your investments grow undisturbed over time.
Review your tax withholdings
Sure, Tax Day isn’t for a few more months. Still, now is a good time to review your tax withholdings and payments. If you had a major life event in 2024—like a marriage, divorce, or child—you probably want to adjust your withholding. Check out the Tax Withholding Estimator from the IRS to effectively tailor how much income tax to withhold.
Update your beneficiaries
Like I mention above, if you had a major life change, you’ll want to update the beneficiaries of your finances accordingly. Write down the names of everyone included in the beneficiary portion of your bank accounts, retirement accounts, life insurance policies, and annuities. The end of the year is a prime time to take stock of anyone who may have entered or exited your life and needs to be covered (or perhaps removed).
Reassess your budget
A budget is a living document. If you fell off 2024's resolutions back in the spring, it's never too late to get back on track.
A good place to start is with the 50/15/5 guideline, where 50% of your after-tax income should go towards essential expenses (e.g., rent, utilities, groceries, etc.), at least 15% of pretax income goes towards retirement and 5% should go towards an emergency savings fund. The other 30% is for discretionary spending like travel and dining out. You can use this budget calculator to see how your savings and spending stack up.
Set new financial goals
No matter the current state of your finances, it’s important to be honest with yourself. Sit down and physically write out where you could boost the health of your personal finances. You might even set a values-based budget. Think: Do you have a plan to pay off your debt? Does your spending need to reined in? Are you saving where you could be investing, or vice versa?
My number one tip: Be specific. Figure out what goals you’re trying to reach, when you want to reach them, and how much you want to save. For example, if you’re saving for an upcoming trip, set aside a predetermined amount of money each month to reach your goal. Set plans in motion to accomplish the goals using tactics like budgets, high-yield savings accounts, automated savings contributions, etc.
Think about your priorities going into the new year. You might consider investing in a financial professional to use as a sounding board, as their perspective could be the nudge you need to create (and achieve) your short- and long-term financial goals.
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