Do you want financial success in 2025? Make These 10 Money Moves Before The Year Is Over

It’s a busy time of year. If you want to prepare for a prosperous 2025, there is one thing you should be sure to do before 2024 is over: get your finances in order.

To maximize your savings to avoid unnecessary taxes, taking these early in the year is worth the time.

Read more: Money Advice Shouldn’t Stress You Out. Keep it Simple with these 6 Tips

10 money moves to make before the end of the year

Start 2025 with a strong financial foundation by doing these things now.

1. Use your remaining FSA funds

Flexible spending accounts they are typically use-it or lose-it accounts. This means that you usually cannot carry funds back from one year to the next. If you still have money in your FSA, make sure to spend it before December 31st. You can use your FSA funds for many items, including contact lenses, prescription drugs and bandages.

2. Max out your retirement contributions

“The more money you can put into a retirement account, the better,” he said Chris Berkelinvestment advisor and president of AXIS Financial. There are limits to how much you can put into a 401(k) or IRA per year, and contributing as much as you’re allowed can help you reach your savings goals faster. “If you plan to contribute to a retirement account in the near future, take advantage of current limits to maximize where possible,” Berkel said.

3. Consider donating to a charity

Donating to charity can be very rewarding. Your donations will not only lead to warm feelings and a good night’s sleep. They can also help when tax season approaches. You can write off charitable contributions in cash on your taxes up to 50% of your adjusted gross income. This can reduce your taxable income and potentially land you in a lower tax bracketreducing how much tax you owe.

4. Review your insurance policies

Insurance is an essential part of a well-balanced financial strategy. Your insurance coverage may no longer fit your personal or financial situation. For example, major life events such as marriage or the birth of a child can significantly affect the amount of coverage you need. Check your auto insurance, homeowners or renters insurance, health insurance and other policies and consider how your needs have changed in the last year. So, compare other providers to make sure you always get the best possible deal.

5. Review and rebalance your investment portfolio

You should rebalance your investment portfolio at least once a year. This ensures that your investments stay on track to help you achieve your goals. Emily LukeCFA, CPA, CEO and co-founder of Plenty, says rebalancing doesn’t have to be cumbersome. “You shouldn’t need to make material changes in what you invest in unless you’re approaching big milestones like buying a home or retiring,” Luk said.

What should you do? “The No. 1 investment mistake today’s adults make is holding too much money,” Luk said. “So before you start rebalancing your investment portfolio, you have to rebalance your money.” This means making sure you have three to six months of expenses in one emergency fund and for the goals you want to achieve in the next year.

Once you have your cash funds in place, think about what your asset allocation should be. One way experts recommend doing this is based on your age. For example, if you are 25, consider holding 25% of your investments in lower risk assets such as bonds and 75% in higher risk assets such as stocks. As you age, your appetite for risk will likely decrease, so you’ll shift more money into low-risk assets.

From there, consider diversifying across asset classes. For example, to diversify your holdings, you can invest in low cost index funds. These funds use investments from large groups of investors to build diverse portfolios that track indexes such as the S&P 500 and the Dow Jones Industrial Average. You can diversify your bonds with exchange-traded funds that track Treasury bonds and other Treasury-backed securities, as well as bonds from issuers like Vanguard.

To determine the best investment strategy for you, talk to a financial professional.

6. Update your beneficiaries

There are many reasons you may want to change the beneficiaries for your insurance policies and estates. Maybe your children have become adults and they don’t rely on you as much as in the past, or maybe you have a new spouse to support. It is important to regularly review your beneficiaries and ask if your current list is accurate according to your wishes. If not, now is a good time to update.

7. Review your interest rates

The interest rate environment is changing rapidly. The Federal Reserve has cut the benchmark federal funds rate twice in recent months, and more rate cuts are expected in the coming months. This can influence your money in many ways.

Here are a few things to consider to make current interest rates work to your advantage.

• Savings accounts: High yield savings accounts can pay annual percentage returns, or APY, up to 10 times the national average rate (or more). If your money is languishing in an account with a poor APY, switching to a HYSA can help grow your fund faster. And with taxes on the way, the sooner you open one, the more interest you stand to earn.

• cd: A certificate of deposit it’s a good way to lock in today’s APY before additional rate cuts. Unlike savings accounts, which have a variable rate, your CD rate is fixed when you open an account, so your returns will stay the same even if the Fed cuts rates again. Also, if you have a CD matures quicklymake sure you check the competitor’s rates before you get caught.

• Mortgages: Mortgage rates are falling. Market rates are currently around 7%, and are expected to drop to around 6% by the end of the year. If you bought your home when rates were high, you may want to consider refinancing. The general rule is that it can be worth it if you can lower your rate by at least 1%. Rates could fall in the mid-to-high 5% range over the next year, so keep that in mind when making your decision.

• Debts: If you have high interest debts such as credit cards and personal loans, you may be able to take advantage of recent rate reductions for consolidate your debt and pay your balances faster.

8. Consider a Roth conversion

With traditional retirement accounts like 401(k)s and IRAs, you make pre-tax contributions: Taxes are deferred until you start withdrawing funds from your retirement account. You may be able to maximize your tax advantages by converting your traditional retirement account into a Roth IRA.

With a Roth IRA, you make your contributions with after-tax money. So, when you withdraw from your withdrawal account, you do so on a fee-free basis. This means you won’t pay income tax on the growth your Roth IRA produces, which could offer significant savings over traditional retirement alternatives. Consider these things when you decide if this is the right path for you.

9. Take any required minimum distribution

If you are 73 or older, it is important to take the required minimum distribution from your retirement accounts before the end of the year. If you do not, the remaining amount that should have been withdrawn will be subject to a 25% excise duty. You can use it this calculator to determine your required minimum distribution if you are not sure what yours is.

10. Set financial goals for the new year

Keep the positive momentum going by creating money goals to carry into the new year. Examples may include:

• Debt payment: If you have high-interest credit card debt, your first financial priority should be getting rid of it. Create a plan for pay off your debt for good

• Mastering your budget: It’s relatively easy to create a budget, but it can be difficult to stick to one. Make a goal not only create your budget but to master in the new year.

• They fully fund your emergency savings: Most experts agree that you should have at least three months of expenses in your savings account at any time. If that’s not the case now, aim to fully fund your emergency account by the end of 2025.

• Find your savings sweet spot: Do you know how much money you can comfortably save every month? Here is a guide to do this.

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