5 End of Year Money Moves for a Better 2025

As the year comes to a close, it’s the perfect time to start thinking about your financial goals and strategies for the year ahead. In this video, financial advisor Kyle and host Erin discuss five key money moves you can make before the end of 2024 to set yourself up for success in 2025.

1. Do a Budget Checkup and Shore Up Your Emergency Fund

The first step is to review your budget and spending from the past year. With inflation and interest rate changes, your monthly expenses may have shifted significantly. Take the time to carefully review your budget and make any necessary adjustments. This will help ensure you’re entering the new year on solid financial footing.

Additionally, make sure your emergency fund is well-stocked. Experts recommend having 3-6 months’ worth of living expenses saved in an easily accessible account. If your emergency fund is lacking, use the end of the year to boost your savings.

2. Max Out Your Roth IRA or Consider a Conversion

Contributing the maximum amount to your Roth IRA each year is a smart move that can pay big dividends down the road. If you have the financial means, max out your Roth contributions before the end of the year.

Another strategy to consider is a Roth conversion. If you have room in your current tax bracket, you may be able to convert a portion of your pre-tax retirement savings into a Roth account, taking advantage of lower tax rates. This can be a great way to reduce your future tax burden.

3. Take Advantage of a Health Savings Account (HSA)

An HSA is a powerful tax-advantaged account that allows you to save and pay for qualified medical expenses. Contributions are tax-deductible, growth is tax-free, and withdrawals for eligible expenses are also tax-free. If you qualify for an HSA, be sure to max out your contributions before the end of the year.

4. Harvest Losses to Offset Gains

Tax-loss harvesting is a strategy that allows you to sell investments at a loss to offset capital gains elsewhere in your portfolio. This can help reduce your overall tax burden. Be sure to work with your financial advisor to identify any opportunities for tax-loss harvesting in your taxable investment accounts.

5. Rebalance Your Portfolio

With the strong performance of the stock market this year, your portfolio may have become unbalanced, with stocks making up a larger portion than intended. Take the time to rebalance your portfolio to ensure your asset allocation aligns with your risk tolerance and long-term goals.

Bonus Tip: Consider a Qualified Charitable Distribution (QCD)

If you’re planning to make charitable contributions, you may want to consider a qualified charitable distribution (QCD) from your IRA. This allows you to transfer funds directly from your IRA to a qualified charity, avoiding taxes on the distribution.

By implementing these five money moves before the end of the year, you can set yourself up for financial success in 2025 and beyond. Remember to work closely with your financial advisor to ensure you’re taking the right steps for your unique situation.

If you have any questions or would like to discuss these strategies in more detail, the team at First Coast Financial Group is here to help. Visit their website at FirstCoastFinancialGroup.com to schedule a consultation.