Making a List, Checking it Twice: Your End-of-Year Financial Wellness

As the sun sets on 2022, you might be reflecting on the gifts you gave, the Olympian-level feasting that has inspired your current sweatpants couture, or your New Year’s resolutions (let us state for the record that it’s perfectly acceptable to make resolutions whenever you want—do we really need a large, glittering globe in Times Square to kickstart good behavior?)

And while on the subject of New Years…let’s be honest. 2022 was an interesting one for America. We all experienced the reverb of 2020’s pandemic shockwaves while simultaneously slow crawling back to a place of daily balance and routine; a routine that was probably shaped by any number of impactful events.

A high inflation rate, the Russian invasion of Ukraine, the emergence of COVID-19’s Omicron variant, supply chain issues, and a continued shift to hybrid and fully remote work were just a handful of this year’s biggest headlines, and many of these events directly intersected with our own financial picture.

Gas is more expensive. Groceries are more expensive (and in some categories, altogether elusive.) Flights are more expensive which you already know if you had any vacations this past year. And in working more remotely to combat COVID’s shapeshifting nature, even our personal solitude feels more expensive. Just ask any parent who now considers the bathroom to be the best reading spot in the house.

All this to say: we see you.

It has been a game-changing year, and while we can’t opine much on your New Year’s resolutions, what we can do is offer up some financial planning tips that will have you well-positioned (and hopefully less stressed) when 2023 makes its debut.

There is something truly cathartic about being able to check something of your to-do list—especially when the outcome is you feeling more financially poised and empowered. Here are ten suggested ways to end the year strong.

This is the perfect time to look at your major life milestones of the past year (or changes on the horizon) to ascertain how they intersect with your finances. Have you purchased a new car or home? Is someone in your household beginning higher education or staring down the barrel of loan repayment? Have you merged finances through marriage or cohabitation? Examine your income, monthly payments, and create a budget worksheet that reflects any factors that could affect your tax withholdings and overall financial picture.

Does your current employer match your 401(k) plan contributions? Take advantage and contribute what you can. The deadline to contribute to 401(k) is usually December 31ST and if you have an IRA account, you can make contributions right up until Tax Day (April 15, 2023). Doing this will help you reach those retirement savings goals and trim down your tax bill for the current year.

We get it. The last thing you probably want right now is a reminder of your holiday extravagance. This is the time to enjoy the afterglow of presents and feasting. When you have the emotional fortitude, pay off credit card debt or, at minimum, chip away at credit cards that carry the highest interest rates. If you have solid credit, you may be able to pay off debt faster by transferring your credit card debt to a zero or low-interest card (just a heads up that this often comes with a fee.)

The end of the year is a good time to evaluate your credit standing. Beyond the aim of improving your score, monitoring your credit regularly alerts you to any errors or fraudulent transactions. Experian, Equifax, and Trans Union all offer one free credit report per year, but you can expect to pay about $5 to access your score.

If you’re able, put your dollars to meaningful use. Many charitable contributions of money or property are tax deductible and it’s hard to think of a better way to kickstart 2023 than investing in a cause you’re passionate about. Unsure of where to start? Here is a comprehensive list of charities to donate to.

If you’re not already receiving health insurance benefits through your current employer, you can set up coverage for yourself through Marketplace. Choose your plans by Thursday, December 15, 2022, to ensure that your coverage will begin on January 1, 2023. The open enrollment period ends on Sunday, January 15, 2023, so don’t procrastinate. Going a few weeks without any coverage isn’t a worthwhile risk to take, and need we remind you that driveways can be icy this time of year??

While on the subject of health benefits, make sure you check the end-of-year deadline if you have a Flexible Spending Account (FSA) through your current employer. If you don’t take advantage of unused benefits, you’ll lose them when the new calendar year rolls around. Schedule your yearly physical, get a cancer screening, or make that appointment to get your teeth cleaned that you’ve been putting off all year (we don’t judge you.)

When life happens (marriage divorce, birth, death, or shifts in family dynamics) we’re often not fully prepared for the impact this can have. And while none of us have a crystal ball forecasting the future, you can still make plans to ensure your family and loved ones are accounted for. Evaluate your designated beneficiaries and trustees, make any necessary changes, and draft a will if you haven’t done so already.

Only 23% of Americans have emergency savings to cover six months of expenses. This percentage could decrease now that we’re seeing record-breaking inflation at the gas pump and grocery store. While your cash reserves might be a bit lean after the holiday season, consider setting up a direct deposit that funnels even a small percentage of your paycheck into a dedicated savings account.

Is there a family vacation you wanted to take in 2022 but couldn’t budget for? Are there categories you’re overspending in and need to cut back on? Any big purchases you’re planning to make for yourself or others in your household? You might be ruminating on New Year’s resolutions already so consider adding some financial goalposts to round out your 2023 list.

We understand that while to-do lists are a solid start, sometimes having a second pair of eyes and ears is important, too. And that’s where we come in.

GreenPath is a trusted national nonprofit organization with more than 60 years of experience in helping people save money, pay down debt, and build financial resiliency. Our NFCC-certified counselors can help you evaluate your year-end goals and create a customized plan for you based on your specific circumstances and needs.

Check out some of our free resources in this article as you embark on financial planning for 2023. And if we don’t hear from you sooner, we wish you a safe, fun, and festive New Year’s celebration!