Your Year-End Financial Checklist — And Tools That Can Help You Complete It

Home » Money Management » Personal Finance » Your Year-End Financial Checklist — And Tools That Can Help You Complete It

Your Year-End Financial Checklist — And Tools That Can Help You Complete It

Thankfully, 2020 is finally coming to an end. It’s certainly been a challenging year for many, but now it’s time to look forward. As we do so, you may be wondering about some ways that you can start off 2021 on the right financial foot. If so, there are a few tasks you should strive to complete before the ball drops on 2020.

With that in mind here’s a short year-end financial checklist as well as a few tools that may come in handy along the way.

7 Financial Tasks to Complete Before 2021 Arrives

Review your credit report

It’s always a good idea to understand where your credit stands and, perhaps more importantly, ensure that your credit report is accurate. Thus, the end of the year is a perfect time to review your report, check for errors, and if necessary even set a plan to improve your scores. Luckily, there are now plenty of free tools that can help you easily accomplish all of this.

First, to obtain your official Transunion, Equifax, and Experian credit reports, you’ll want to visit the site AnnualCreditReport.com. As that URL implies, this site typically allows you to download your free report from each bureau once per year. However, due to the pandemic, you can now access your reports weekly through April 2021. As a heads up, there are a few steps you will need to go through before you’ll be able to obtain your reports, but it should be a fairly straightforward process.

As for your credit scores, while you may be offered an upgrade on AnnualCreditReport.com to view your current FICO score, I’d recommend using a free site like Credit Karma instead. While this site uses VantageScore 3.0 and may not exactly reflect what creditors will see, it should at least give you a ballpark idea of your credit scores. Plus, it will also provide you with insights and tips for improving your credit, which can definitely be useful.

Inventory your accounts

While some people may do most of their banking through a single account, more and more consumers are expanding their line-up. Because of this, it may be worth going through your current accounts to ensure they’re in good standing, that your passwords are up-to-date, and just to make sure you don’t forget about them! This could include checking accounts, savings accounts, brokerage accounts, retirement savings accounts, credit card accounts, current loan/mortgage accounts, and more.

As you go through this process, it may be helpful to keep a list of all of these accounts somewhere so you’ll be reminded to check them more often. Additionally or alternatively, you could try out an account aggregator that can help you view all of your balances and charges in one place. One popular option is Personal Capital, which has an added emphasis on investments. Meanwhile, a more recent entrant in the space is Fion, which offers a simplified and clean interface to keep tabs on your various accounts.

Lastly, just as it’s smart to keep a list of all of your financial accounts, you may also wish to “inventory” any subscriptions you may have. The easiest way to find these is to review your recent credit card statements and look for recurring charges. Going through this process will hopefully help you to identify expenses you no longer need as well as prepare for any upcoming charges.

Set financial goals for the new year

Now that you’ve checked your credit and reviewed your financial accounts, it’s time to start thinking about what money goals you want to accomplish in 2021. Maybe you want to get better at budgeting, build an emergency fund, or do something fun like finally take a real vacation. Whatever it is, make sure you write it down and sketch out detailed plans to make it a reality.

Meanwhile, if you’re not exactly sure what goals you should be striving for, you may want to check out the site Savology. By answering a few basic questions about your finances (with no need to link any actual accounts), Savology will provide you with a free financial plan and give you suggestions for what your next steps should be. They might also point you in the direction of other tools that may be helpful along your upcoming money journey.

Consider your credit card strategy

Speaking of goals, if you’re currently carrying credit card debt, striving to pay down or even pay off those balances may be at the top of your list. At the same time, if you’re currently debt-free, you might find that using a credit card can allow you to supplement your spending with rewards. Whether you prefer cash back, airline miles, or other points, there are plenty of credit card options out there. Plus, if you don’t mind carrying multiple cards and keeping track of what card makes the most sense for each of your purchases, you can truly maximize the rewards you earn.

As noted, there are now a vast array of card options — from ones that yield cashback to those that feature other perks such as airport lounge access and hotel brand status. Therefore, it’s hard to offer a recommendation in just a few sentences. Instead, you can check out CardRatings’ recent list of the best cards for 2021 across multiple categories or visit some of your growing list of guides.

Assess your insurance needs

Something else to consider as the new year arrives is whether or not you’re properly insured. Beyond the basics like car insurance and health insurance, it may make sense to look into other policies such as renters insurance and even life insurance. In the case of car insurance, if your policy renewal is coming due, now could be a good time to compare quotes from other companies. As for health insurance, while open enrollment for the HealthCare.gov marketplace is now closed, certain life events may still allow you to sign up. Similarly, if you have insurance through your employer, be sure to double-check that your current plan still makes sense for your situation.

Moving on to other types of insurance, renters insurance policies are often underutilized despite the protection they offer. What’s more, these policies are typically comparatively affordable, costing only a few dollars per month. While there are several companies offering renters insurance — including the possibility that you can bundle it with your auto insurance — one growing brand that specializes in these policies is Lemonade.

Lastly, while life insurance isn’t the most pleasant of topics, is can also be an important financial tool. Like with renters insurance, term life insurance policies may also be more affordable than you realize. Again, there are now several options when it comes to term life policies, but Bestow is an online platform that may make for a good starting point.

Check your tax withholding

Similar to how it may be wise to assess your current employer-sponsored health insurance plan, you may also wish to review your current tax withholdings. Whether you’ve gotten married in the last year, had a child, or started a side hustle, these events might mean that a change to your withholdings strategy is needed. As a reminder, accurately adjusting your withholdings will hopefully make it so that you don’t end up owing additional taxes when filing your annual return. Of course, while some taxpayers enjoy the annual windfall of a tax refund, these can also be avoided if you don’t feel like giving the government an interest-free loan. That said, if you do prefer to set aside money to be returned with a refund, there are also options to have a certain amount of each paycheck withheld. Whatever you choose, be sure to speak with your employer’s human resources or payroll department to obtain a new W-4 to fill out.

Get a jump on your tax-year retirement contributions

Finally, while we’re talking taxes, it’s not too early to start thinking about your retirement contributions. Although you do have until April 15th, 2021 to make a contribution and apply it to the 2020 tax year, there’s also no need to wait. There are several ways in which retirement savings can help save you money on your taxes — but of course there’s the added benefit of preparing for your future as well! So, as you’re looking at your banking balances near the year’s end, consider whether it may be time to move some of that cash over to your IRA or another retirement account.


While it probably won’t take a whole lot of effort to ensure that 2021 is better than 2020, you can always help start your year off right by getting your finances in order. In addition to reviewing your current situation and setting future goals, now is also a great time to consider options you may have previously overlooked. Hopefully, with this checklist and some of the tools featured on it, you’ll be able to not only start 2021 off strong but also make your money life even better throughout the new year.

Comments

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Author

Jonathan Dyer

I'm a small town guy living in Los Angeles looking to make solid financial decisions. I write for a number of finance websites, including HuffingtonPost and Business2Community. I founded DyerNews.com in 2015 to focus on personal finance and the emerging FinTech markets.

Other Articles by Jonathan Dyer

Home Lending Tech Platform Roostify Announces $32 Million Funding Round

Another week means another FinTech deal. Today, Roostify announced that it had raised $32 million in its latest round. The Series C was led by Ten Coves Capital with principals at Stone Point Capital as well as returning investors Cota Capital, Mouro Capital, Colchis Capital, Point72 Ventures, and JPMorgan Chase also participating. To date, Roostify has...

Survey Finds 42% of Americans Avoided Large Purchases Last Year

Last year proved to be a financial anomaly in many ways — evidenced by a number of dichotomies that emerged. While the loss of employment and other economic issues impacted many Americans, on the whole, consumers saw increased savings rates and credit card payoffs. Now a new survey from WalletHub looks...

Spirit Airlines Refreshes Co-Branded Credit Card Line-Up

As travelers and travel brands look toward a hopeful future, recent weeks have brought news of both new and refreshed co-branded options. This includes an upcoming U.S.-centric Air Canada card from Chase and a pair of cards from Emirates and Barclays among others. Now, Spirit and Bank of America have...