Want Financial Success in 2025? Make These 10 Money Moves Before the Year Is Up | Global News Avenue

This is a busy time of year. If you want to set yourself up for prosperity in 2025, there’s one thing you should make sure to do before 2024 rolls around: get your finances in order.

From maximizing your savings to avoiding unnecessary taxes, taking these steps before the end of the year is well worth your time.

Read more: Financial advice shouldn’t stress you out. Keep it simple with these 6 tips

10 money-making moves to make before the end of the year

Do these things now to lay a solid financial foundation for 2025.

1. Use your remaining FSA funds

Flexible spending account Usually it’s use or lose the account. This means you generally can’t roll over funds from one year to the next. If you still have money in your FSA, be sure to spend it before December 31st. You can use FSA funds to purchase many items, including contact lenses, prescription drugs, and bandages.

2. Maximize your pension contributions

“The more money you can put into a retirement account, the better,” he said. Chris Burkleinvestment advisor and president of AXIS Financial. There are limits on the amount you can contribute to a 401(k) or 401(k) Irish Republican Army Each year, and contributing as much as possible can help you reach your savings goals faster. “If you plan to contribute to a retirement account in the near future, take advantage of the current restrictions and maximize them as much as possible,” Burkle said.

3. Consider donating to charity

Donating to charity can bring huge rewards. Your donation will bring more than just a warm feeling and a good night’s sleep. They can also help you when tax season rolls around. You can write off charitable cash donations from your taxes, up to 50% of adjusted gross income. This may reduce your taxable income and potentially put you in a difficult position lower tax bracketreducing the amount of tax you owe.

4. Review your insurance policy

Insurance is an important part of a balanced financial strategy. Your insurance coverage may no longer be appropriate for your personal or financial situation. For example, major life events such as marriage or the birth of a child can significantly affect the amount of coverage you need. Review your auto insurance, homeowners or renters insurance, health insurance and other policies and consider how your needs may have changed over the past year. Then, compare other providers to make sure you’re still getting the best deal.

5. Review and rebalance your portfolio

You should rebalance your portfolio at least once a year. This ensures your investments are on track and helps you achieve your goals. Lu HuihuiRebalancing shouldn’t be a hassle, says CFA, CPA, CEO and co-founder of Plenty. “Unless you’re closer to a major milestone like buying a home or retiring, you don’t need to make major changes to your investments,” Luke says.

What should you do? “The No. 1 investing mistake adults make today is holding too much cash,” Luke said. “So before you start rebalancing your portfolio, you should rebalance your money.” That means making sure you have three to six months’ worth of expenses emergency fund and what you want to achieve in the next year.

Once you determine your cash holdings, consider what your asset allocation should look like. One way experts recommend doing this is based on your age. For example, if you are 25 years old, consider holding 25% of your investments in low-risk assets such as bonds and 75% in high-risk assets such as stocks. As you age, your risk appetite may decline, so you move more money into less risky assets.

From here, consider asset class diversification. For example, to diversify your stock holdings, you could invest in low-cost index funds. These funds leverage investments from a large number of investors to build diversified portfolios that track indexes such as the S&P 500 and the Dow Jones Industrial Average. You can diversify your bond holdings through exchange-traded funds that track Treasury bills and other Treasury-backed securities, as well as bonds from issuers like Vanguard Group.

To determine which investment strategy is best for you, consult a financial professional.

6. Update your beneficiaries

There are many reasons why you may want to change the beneficiaries of your policy and estate. Maybe your children have grown up and are no longer as dependent on you as they once were, or maybe you have a new spouse to support. It’s important to check in with your beneficiaries regularly and ask yourself whether the current list meets your wishes. If not, now is a good time to update.

7. Review your rates

The interest rate environment is changing rapidly. The Fed has cut its benchmark federal funds rate twice in the past few months, with further cuts expected in the coming months. This can be done Affect your money In several ways.

Here are a few things to consider in order to make current interest rates work in your favor.

• Savings Account: high yield savings account You can pay an annual percentage yield (APY) of up to 10 times the national average rate (or more). If your money is stuck in an account with a paltry APY, switching it to HYSA can help you grow your profits faster. With interest rates falling, the sooner you open, the more interest you’ll earn.

• CD: one Certificate of deposit A great way to lock in today’s APY before further rate cuts. Unlike savings accounts with variable interest rates, your CD interest rate is fixed when you open the account, so even if the Fed cuts interest rates again, your returns will remain the same. Also, if you have CD is about to maturebe sure to check competitors’ rates before extending.

• Mortgage: Mortgage rates are falling. The current market interest rate is about 7% and is expected to drop to about 6% by the end of the year. If you bought a home when home prices were at their peak, you may need Consider refinancing. A general rule of thumb is that if you can lower your rates by at least 1%, it’s probably worth it. Interest rates are likely to fall into the mid-to-high 5% range next year, so keep that in mind when making your decision.

• debt: If you have high-interest debt such as credit cards and personal loans, you may be able to take advantage of the recent rate cut Consolidate your debt And pay off your balance faster.

8. Consider a Roth conversion

With traditional retirement accounts like 401(k)s and IRAs, you can make pre-tax contributions: taxes are deferred until you start withdrawing funds from the retirement account. You may be able to maximize your tax advantages by converting a traditional retirement account to a Roth IRA.

With a Roth IRA, you can make contributions with after-tax dollars. Then, when you withdraw funds from the account in retirement, you will do so on a tax-free basis. This means you don’t have to pay any income taxes on the growth your Roth IRA generates, which can provide meaningful savings compared to a traditional retirement option. consider these things When deciding if this is the right route for you.

9. Take any required minimum allocations

If you are 73 or older, be sure to take required minimum distributions from your retirement accounts before the end of the year. If you do not do this, the remaining amount you should withdraw will be subject to 25% consumption tax. You can use this calculator If you’re not sure what your minimum allocation is, determine the minimum allocation required.

10. Set financial goals for the new year

Keep the positive momentum going by setting financial goals for the new year. Examples may include:

• Pay off debt: If you have high-interest credit card debt, your first financial priority should be getting rid of it. Make a plan pay off your debt forever.

• Stay on top of your budget: Creating a budget is relatively easy, but sticking to it can be difficult. Setting goals is not only Make a budget but stay on top of it In the new year.

• Fund your emergency savings: Most experts agree you should At least three months of expenses Always in your savings account. If that’s not currently the case, aim to fully fund your emergency account by the end of 2025.

• Find your savings sweet spot: Do you know how much money you can easily save each month? Here is a guide to doing this.

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