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by Christy Bieber | Updated July 21, 2021 - First published on Dec. 8, 2019
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The end of the year is a good time to wrap up loose ends and take steps to set yourself up for next year. When it comes to money tasks, these should be on your list.
The year 2019 is quickly coming to an end. And while you're probably focused on holiday fun, it's also an important time to take stock of your finances and make sure you've had a successful year in terms of managing your money.
With just a few weeks left in 2019, you can still check a few key tasks off your financial to-do list if you haven't already. Here are six that you should take care of before the ball drops on New Years and 2020 is ushered in.
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Many investment accounts come with tax breaks, including a workplace 401(k), an IRA, a 529 college savings account, and a health savings account (HSA).
If you have access to and are eligible to contribute to these accounts, aim to max them out before the year comes to an end -- or at least to contribute as much as you can afford. If you don't make contributions before tax day, you'll forever lose out on the deduction you could've scored for 2019.
If you have any losing investments, it might make sense to sell them to harvest the tax losses. You can use investment losses to offset capital gains taxes. Or you can deduct up to $3,000 from other income sources if you have capital losses but no gains to offset.
You likely don't want to unload an investment you think may recover soon just to score a tax break. But if you have little hope of your investment regaining its value and you want to save on your tax bill, selling before the end of the year to claim the loss could be worthwhile.
If you have money in a flexible spending account (FSA) for healthcare, you should aim to spend the money before the year's end.
FSA accounts are generally use-it-or-lose-it, although some accounts allow you to carry over up to $500. If you have more than $500 or your fund doesn't allow a carryover, the money could be gone forever if you don't spend it.
There are lots of things you could do with your FSA funds. You could potentially pre-order prescriptions you'll need in the new year, or look into types of over-the-counter items you can buy from the drug store, including personal care items and non-prescription medications.
The end of the year is a great time to take stock of how well you stuck to your budget. Review the spending limits you set for yourself, compare them to your actual spending, and see if there were problem areas. Then, make a plan going forward for how your budget will change in 2020 based on how you did this year.
The start of a new year is a great time to make new financial goals. Try to come up with a few things you hope to accomplish with your money in 2020, such as paying off credit cards or increasing the amount you're saving for retirement.
Be specific in the goals you set and break them down into what you need to do each week or each month. That way you'll maximize your chances of success.
Finally, consider calculating your net worth, which is a measure of your assets minus your liabilities. It can take a little while to do this the first time, since you'll need to add up the value of everything you own and figure out your total outstanding debt balance. But once you've calculated this once, you can track it each year to see how you're progressing.
A positive net worth shows you own more than you owe and are hopefully on track to financial independence. A negative net worth is common when you're young, but shows you need to do some work at paying down debt and acquiring more assets with value.
Completing these six steps will ensure you end 2019 on the right financial footing and set you up for future success in 2020. Start working on them today while you still have the time to check them off your list before the new year comes.
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