As the year draws to a close, it's crucial to take a moment and assess our financial standing. New Year's resolutions provide the perfect opportunity to set new goals and make the most of the remaining days. Let's dive into some key areas to consider.

Unlock Financial Success in 2025

Don't Lose Out on Flexible Spending Dollars

If you have a Flexible Spending Account (FSA), time is of the essence. Check with your employer's rules regarding the balance on December 31st. Don't let your hard-earned funds go to waste. You can use your remaining FSA funds on various qualifying healthcare costs. For instance, upgrade your prescription eyeglasses or purchase more contact lenses. Visit your local pharmacy and stock up on FSA-eligible over-the-counter products such as first aid supplies, cold medicines, and sunscreen. A complete list can be found at the FSA store. Additionally, the employee health FSA contribution limits are increasing from $3,200 to $3,300 in 2025.

Max out Your Retirement Contributions

If you have the means, it's wise to maximize your retirement contributions. In 2025, 401(k) participants can contribute up to $23,500. For IRAs (traditional and Roth), the limit is $7,000. Those aged 50 or older can make an additional $1,000, totaling $8,000. Starting in 2025, employees aged 60 to 63 will be able to make larger catch-up contributions to their 401(k) plans, with limits set at either $10,000 annually or 150% of the standard catch-up contribution limit. Remember, consistent contributions and letting your investments grow undisturbed over time is the key to a successful retirement.

Review Your Tax Withholdings

Although Tax Day is still a few months away, it's a good time to review your tax withholdings and payments. If you experienced a major life event in 2024, such as marriage, divorce, or the birth of a child, it's likely that you need to adjust your withholding. Utilize the Tax Withholding Estimator from the IRS to ensure you are withholding the appropriate amount of income tax.

Update Your Beneficiaries

Just as with tax withholdings, if you had a major life change, it's essential to update the beneficiaries of your finances. Write down the names of everyone included in the beneficiary portion of your bank accounts, retirement accounts, life insurance policies, and annuities. The end of the year is a great time to assess who needs to be covered or perhaps removed from these designations.

Reassess Your Budget

A budget is not a static document; it should adapt to our changing circumstances. If you slipped off track with your 2024 resolutions in the spring, it's never too late to get back on course. Start with the 50/15/5 guideline. Allocate 50% of your after-tax income to essential expenses like rent, utilities, and groceries. At least 15% of your pretax income should go towards retirement, and 5% should be set aside for an emergency savings fund. The remaining 30% can be used for discretionary spending such as travel and dining out. Use a budget calculator to evaluate your savings and spending habits.

Set New Financial Goals

Regardless of your current financial situation, it's important to be honest with yourself. Sit down and write out specific goals to improve your personal finances. You might consider a values-based budget. Ask yourself questions like: Do you have a plan to pay off your debt? Do you need to rein in your spending? Are you saving where you should be investing, or vice versa? For example, if you're saving for a trip, set aside a fixed amount each month to reach your goal. Use tactics like budgets, high-yield savings accounts, and automated savings contributions to set your plans in motion and achieve your short- and long-term financial goals.Think about your priorities for the new year. You may want to invest in a financial professional to get their perspective and gain the push you need to create and achieve your financial goals.