The end of the year is the perfect time to reassess your financial health and prepare for a stronger 2025. With total consumer debt reaching $17.7 trillion in 2024 and pandemic savings depleted, many Americans face financial challenges. These end-of-year money-saving hacks can help you tackle debt, save effectively, and position yourself for success.

Perform a Budget Checkup

A financial year-end review begins with evaluating your budget. Check if your spending aligns with your expectations. Compare actual expenses with your initial plan and identify areas of overspending. If you spent more than anticipated, outline strategies to cut unnecessary costs or boost income. Conversely, if spending was under budget, consider increasing contributions to savings or investment accounts. Regular adjustments ensure your budget reflects your evolving financial priorities.

Dziana Hasanbekava | Pexels | A financial year-end review begins with evaluating your budget.

Shore Up Your Emergency Fund

An emergency fund acts as a financial safety net during unforeseen circumstances. Without it, you risk relying on high-interest credit cards or loans. Assess your current savings and aim to cover at least three to six months of living expenses. Self-employed individuals or those with variable incomes may need more. Regular contributions to a high-yield savings account help build this cushion over time.

Use Up Flexible Spending Account Funds

Flexible Spending Accounts (FSAs) provide pre-tax funds for healthcare expenses, but unused balances may be forfeited after the year ends. Review your FSA balance and eligible expenses to avoid losing money. Check with your employer for rules regarding grace periods or carryovers. Use these funds on qualifying items such as medical visits, prescriptions, or other approved expenses before they expire.

Audit Subscriptions and Cancel Unused Ones

Subscription costs often creep up unnoticed, draining resources. Reviewing bank and credit card statements can help identify unused subscriptions. Cancel those you no longer need, reducing unnecessary expenses. Services like Rocket Money simplify tracking recurring charges. Reallocating saved funds to essential categories or savings goals creates a more streamlined budget.

Schedule Health Appointments Before Deductibles Reset

Insurance deductibles typically reset on January 1, so scheduling necessary medical appointments now can save money. Additional services will cost less out of pocket if you've already met your deductible. Waiting until next year means starting over on deductible payments and increasing expenses for similar services.

MART PRODUCTION | Pexels | Scheduling necessary medical appointments before deductibles reset.

Max Out Tax-Advantaged Accounts

Tax-advantaged accounts such as 401(k)s, IRAs, and HSAs offer significant benefits. Contributing the maximum allowable amount reduces taxable income and enhances retirement savings. While the contribution deadline for 2024 extends to April 15, starting now ensures you maximize these benefits. If employer matching is available, prioritize contributing enough to secure the full match, as this essentially doubles your savings.

Optimize Taxable Investment Accounts

Taxable brokerage accounts provide flexibility in withdrawals and investment choices. End-of-year tasks include rebalancing portfolios to maintain target allocations and performing tax-loss harvesting. Selling underperforming assets to offset capital gains reduces your tax liability. Strategic adjustments keep your investments aligned with financial goals and minimize unnecessary costs.

Pay Down High-Interest Debt

High-interest debt significantly hampers financial progress. Focus on reducing credit card balances and similar obligations before entering the new year. Even small additional payments, such as $50 extra monthly, can substantially lower interest costs over time. Reducing debt now creates more breathing room in next year’s budget.

Evaluate Refinancing Opportunities

With falling interest rates, refinancing large loans like mortgages or car loans can save money. Compare your current rates with market options to identify potential savings. While refinancing involves fees, the long-term reduction in interest costs often outweighs the initial expense. Ensure you calculate the total savings and assess qualification criteria like credit scores before proceeding.