Your 5-Point Year-End Personal Finance Checkup

Check these items off your list before 2021 wraps up.

Whether 2021 was a good year for you, at this point, it's almost over. But before you get ready to welcome 2022, it's important to give your finances a close look. Here are five essential steps to take before the new year arrives.

1. Check your credit report

Your credit report is an overview of your various accounts and loans and how current you are on them. It's important to get that snapshot of your borrowing picture so you can make sure you're up to date on your various payments. But also, checking your credit report could be a good way to pinpoint financial fraud early.

Sometimes, criminals will open credit cards or credit lines in consumers' names and rack up charges against them. You might only discover that you've been victimized upon reading your credit report and seeing an account you don't recognize.

2. Review your budget

If you set up a budget earlier in the year, your expenses may have changed since. Similarly, your income may be rising for 2022, which could mean you're able to spend a little differently. Now's a good time to take a look at your budget and make sure it's accurate. If it's not, tweak those numbers accordingly, so your budget is ready for the new year.

3. Use up your FSA

If you contributed money to a flexible spending account (FSA) for 2021, now's a good time to check your balance. Though some FSAs will let you carry over a small amount of money into the next plan year or give you a grace period for using your funds, you may have to spend your balance by Dec. 31 or risk losing it. See what options you have, and if there's money in your account that you need to spend, think about some of the medications or FSA-eligible supplies you can stock up on, like bandages and certain over-the-counter treatments.

4. See how you're doing on retirement plan contributions

If you're saving for retirement in an IRA or 401(k), your goal may be to max out your contributions (meaning, contribute the maximum amount allowed for the year by the IRS) or simply save more than you did last year. Now's a good time to check on your contributions to date and figure out a way to sneak more money into your account before the end of the year if you haven't hit your personal target yet.

5. Check on your brokerage account

If you have investments in a brokerage account, it's a good idea to review them from time to time. If you haven't done that in a while, take that step in the coming weeks. You may decide to sell a stock that's been performing poorly and use that loss to lower your 2021 taxes. You can use capital losses in your portfolio to offset gains on stocks sold at a profit or to offset some of your regular income. You may also want to shift some investments around for more diversity.

The moves you make at the end of the year could set you up for a financially strong 2022. Aim to tackle these items before the clock runs out on 2021. You'll be thankful you did.