By Bill Taber
The last several years have brought their fair share of challenges. With worries about persistent inflation, it’s natural to wonder if 2025 will bring any relief. While these concerns are valid, your personal finances don’t have to mirror the uncertainty of the past. There are plenty of strategies to regain control and set yourself up for financial success moving forward. Before the new year arrives, here are five essential steps to keep your financial focus strong.
1. Assess Your Emergency Fund
Now is the time to ensure that you have enough money set aside in your emergency fund or create a plan to build this up over the next year. An adequate emergency fund should cover 6-8 months of necessary living expenses, including mortgage or rent, utilities, groceries, transportation, etc.
With all stock market uncertainty and recession fears, many experts now suggest maintaining a larger emergency fund closer to 8-12 months of expenses. If you’re single, or your household only has one source of income, consider saving on the higher end of this scale to make sure you’re covered in the event of a job loss or reduction in pay.
However much you save, be sure this money is held in a highly liquid account. It needs to be readily available and easily accessible, but it should also be in an account that offers a competitive interest rate so that you don’t lose out on potential growth.
2. Review Your Asset Allocation & Invest with Impact
The end of the year is also a great time to review your asset allocation strategy and incorporate ESG and impact investing if desired. Given the continued impact of market volatility and historic levels of inflation these past few years, it’s crucial that you evaluate your investments and make sure your portfolio is properly diversified. It should also be tailored to your specific risk tolerance level, ensuring that you are earning enough returns to keep up with inflation, but you are not overexposing yourself to risk.
If you are interested in using your funds to support environmental, social, or governmental issues (ESG), you can also consider impact investing as a way to earn returns while also promoting change in causes you care about.
3. Consider Charitable Donations
Charitable donations are another option that can be reviewed as the year-end approaches. The holidays are a great time to give money and assets to your favorite non-profits, churches, and organizations.
Charitable donations can be used as part of your overall tax strategy, or as part of a comprehensive estate plan. Both options provide many potential benefits including supporting causes you care about, reducing your taxable income, and reducing your taxable estate.
4. Use Up Your Employee Benefits
While every employee benefit plan has its own rules and regulations, many of them expire or reset at the end of the year. You worked hard for these perks, so be sure to use them before it’s too late!
Medical and Dental Benefits
Now’s the time to take care of all your healthcare needs before your deductible resets. Dental plans in particular often have a maximum coverage amount. If you haven’t used the full amount and anticipate any treatments, make it a priority to set an appointment before December 31st.
Flexible Spending Account
Like your health insurance benefits, you’ll want to use up as much of your FSA (flexible spending account) dollars as possible by the end of the year since you are only allowed to carry over $640 for the plan year-ending 2024. That being said, check the restrictions on your account to see what the money can and cannot be used for, and take care of any needs you may have as allowed by your plan.
Sick and Vacation Time
Depending on your company, your sick or vacation time might expire at the end of the year. Check with your HR department to learn about any expiration dates. If it does expire, fit in a last-minute staycation or take some time off to work on projects you’ve been putting off. If you need to make any trips to the doctor, schedule those appointments now to make use of paid-time-off benefits before you lose them.
5. Revisit Your Plans and Policies
Lastly, take another look at your estate plan and insurance coverage. If you took the time and energy to create an estate plan, check it periodically to ensure all the documents and beneficiary designations are up to date and no major details have changed.
Your insurance needs may also change as the year goes by, so periodically review your coverages and designated beneficiaries to bring them up to date to reflect your current financial situation. For example, if you paid off debt, you may not need as much life insurance coverage since your family’s liabilities have decreased. You might also want to evaluate your need for other types of insurance, such as long-term care or disability insurance.
Team Up With an Experienced Advisor
At TABER Asset Management, we’re here to help you regain control of your finances after a challenging few years. Let’s work together to make your financial goals happen in the new year.
Get started today by scheduling a 15-minute intro phone call online or reaching out to us at 515-557-1860 or invest@taberasset.com.
About Bill
Bill Taber is President and Founder of TABER Asset Management, an independent, fiduciary wealth management firm, in Des Moines, Iowa, that strives to do one thing well: manage their clients’ money by creating wealth, building wealth, growing income, and preserving capital so they can experience financial freedom. With more than four decades of experience, Bill is dedicated to building relationships with his clients and their families and walking alongside them as they navigate financial decisions. His favorite days are the ones when he gets to witness the joy and relief on his clients’ faces when they realize they can pursue their dreams and live their ideal lifestyles. Bill is known for going the extra mile, getting things done with integrity, and working with a stewardship mentality.
Bill graduated from the University of Iowa with a bachelor’s degree in business administration and fell in love with the profession when he got to help one of his first clients—his father—turn his lifetime of hard work into a dream retirement. He got his start in the industry as a corporate services representative for Bankers Trust Company and spent decades working as Assistant Vice President of E.F. Hutton & Co. and First Vice President of Principal Financial Securities. He is also a graduate of the E-Myth Worldwide Mastery Business Development Program and is Series 65 registered.
In his spare time, Bill enjoys giving back to his community and spending time with his family. His hobbies include traveling, gardening, reading, and practicing yoga, Pilates, and meditation. He also loves the simple joys of listening to music, going for walks or bike rides, and being in nature. To learn more about Bill, connect with him on LinkedIn.
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