End Of Year Financial Review: A Guide To Closing Out The Year On A High

As the year winds down, it’s the perfect time to press pause and reflect on your financial journey over the past twelve months. Conducting an end-of-year financial review isn’t just about numbers—it’s about gaining insight into your progress and setting the stage for a stronger financial future. Let’s dive into some practical steps to help you wrap up the year on a strong financial note.

Assess Your Current Financial Position

Before setting new goals, take notice of where you currently stand. Gather your financial documents, including bank statements, credit card bills, loan balances, and investment account summaries. Use these to calculate your net worth by subtracting what you owe (liabilities) from what you own (assets). This is known as a balance sheet and will give you a clear understanding of your current financial standing. When reviewing your balance sheet, consider asking yourself these questions for further insight:

• Did I make progress toward my financial goals this year?
• Have I successfully saved or paid down debt?
• Am I staying within my budget, or do I need to revisit it?

Spot Spending Trends

Take a closer look at your spending habits over the past year. Categorize your expenses into essentials, discretionary items, and savings contributions. Identifying patterns can help you find areas where small adjustments could lead to big savings.

Here are a few tips for trimming expenses:

• Use budgeting tools or apps to analyze your spending.
• Highlight categories where you tend to overspend.
• Set limits for non-essential expenses in the coming year.

Check In on Savings and Investments

Are you on track to meet your savings and investment goals? Whether you’re building an emergency fund, saving for retirement, or working toward other milestones, now’s the time to evaluate your progress. Review your investment performance and ensure your portfolio aligns with your financial objectives.

Consider these moves:

• Increase contributions to retirement accounts like 401(k)s or IRAs.
• Rebalance your investment portfolio if needed.
• Explore options like high-yield savings accounts to maximize returns on cash savings.

Prepare for Tax Season

Taxes might not be the most exciting topic, but getting organized now can save you stress later. Gather all relevant documents, such as income statements, charitable donation receipts, and records of deductible expenses. Taking these steps can also help you identify last-minute opportunities to lower your tax bill.

Be sure to:

• Review your W-2 or 1099 forms.
• Make final contributions to tax-advantaged accounts.
• Plan for any potential refunds or payments due.

Set Goals for the Year Ahead

Reflect on what worked well this year and where there’s room for improvement. Use those insights to set actionable financial goals for the new year. Whether you’re planning to pay off debt, save for a big purchase, or invest in personal growth, clear and realistic goals can guide your decisions.

Make your goals SMART:

• Specific, Measurable, Achievable, Relevant, and Time-bound.
• Prioritize goals based on importance and feasibility.

Final Thoughts

An end-of-year financial review is more than just a chore—it’s an opportunity to celebrate your progress and prepare for what’s next. By taking the time to reflect, assess, and plan, you can move into the new year with confidence and clarity. At Harvard Federal Credit Union, we’re here to support you at every step—from saving smarter to achieving your biggest financial goals.

Take charge today, and set yourself up for success tomorrow!