A Comprehensive Guide to Your Year-End Financial Accounts

The end of the year is an ideal time to take stock of your financial health and make necessary adjustments to set yourself up for a prosperous future. By conducting a thorough financial checkup, you can identify areas where you can save money, reduce debt, and optimize your investments.

Your year-end review should start with your bank accounts, confirming you’re earning the most competitive rates while avoiding unnecessary fees that can chip away at what you earn. From there, look at your investment accounts to confirm they still match your financial goals and risk tolerance as you plan for retirement. You should also review your estate-planning documents, insurance coverage and tax situation to protect both your assets and loved ones.

We walk through seven steps of your financial checkup to help you enter 2025 on solid financial footing.

In this article

Review Your Bank Accounts

Optimize Your Checking Account:

Evaluate Fees: Are you paying excessive fees for maintaining your checking account? Consider switching to a fee-free account or a high-yield checking account that offers rewards.
Maximize Your Savings: Explore high-yield savings accounts (HYSAs) to earn higher interest rates on your savings.

Review Your Savings Accounts:

Assess Your Savings Goals: Are your savings accounts aligned with your financial objectives?
Consider Certificates of Deposit (CDs): For longer-term savings, explore CDs to lock in higher interest rates.

Evaluate Your Investments

Rebalance Your Portfolio:

Ensure your investment portfolio aligns with your risk tolerance and financial goals.
Rebalance your portfolio to maintain your desired asset allocation.

Review Retirement Accounts:

Maximize Contributions: Take advantage of tax-advantaged retirement accounts like 401(k)s and IRAs.
Consolidate Old 401(k)s: Consider consolidating old 401(k)s into an IRA for easier management and potential cost savings.
Take Required Minimum Distributions (RMDs): If you’re 73 or older, ensure you take your RMDs on time to avoid penalties.

Shop for cheaper car insurance

Car insurance premiums have been steadily increasing in recent years, making it crucial to frequently shop for better rates to maximize your savings while maintaining the coverage you need. Compare coverage levels and potential savings Your insurance needs likely shifted over the years, including how much you drive or where you park your car.

For example, if you’ve started to work more from home or moved to a new neighborhood, these changes could qualify you for better rates or prompt a change in coverage levels. why you should review your current policy’s coverage against your actual needs. For example, if you drive less than 7,500 miles annually you might qualify for a lower premium or a low-mileage discount. Consider adjusting your deductibles and coverage based on your vehicle’s current value and your financial situation.

For instance, if you drive an older car worth less than $4,000, you might choose to drop comprehensive and collision coverage and save $300 to $600 annually. Just make sure you maintain enough savings to repair or replace your vehicle if needed.

You can also consider usage-based insurance programs that track your driving habits through an app or device. These programs often reduce premiums by 10% to 40% for safe, low-mileage drivers. Although they come with privacy concerns and risk of sharing data with your insurance provider.

Major insurers like GEICO and Progressive now offer specific programs for mature drivers. These discount programs help lower your premium and, depending on your provider, may offer additional perks like additional discounts for retirees and accident forgiveness to prevent your rates from going up after your first-at fault accident.

Consider gathering quotes from at least three different insurers to compare rates and coverage options. Each company calculates risk differently, so prices can vary significantly for the same coverage. For example, one company might charge $1,200 annually for full coverage while another offers identical protection for $900. But donât base your decision on coverage cost alone. Instead, pay attention to each company’s reputation for customer service and claims handling.

Insurance Checkup

Review Your Car Insurance:

Shop for Better Rates: Regularly shop for car insurance to find the best deals.
Consider Usage-Based Insurance: Explore usage-based insurance programs to potentially lower your premiums.

Assess Your Health Insurance:

Review Your Coverage: Ensure your health insurance plan meets your needs and budget.
Maximize Your FSA Benefits: Use your Flexible Spending Account (FSA) funds before the year-end.

Home and Housing

Evaluate Your Housing Situation:

Consider Your Long-Term Needs: Assess whether your current home aligns with your future plans.
Review Home Insurance: Ensure your home insurance coverage is adequate and up-to-date.

Home Maintenance:

Schedule Necessary Repairs: Address any maintenance issues to prevent future problems.
Energy Efficiency: Implement energy-saving measures to reduce utility costs.

Financial Habits and Spending

Track Your Spending:

Use budgeting tools to monitor your expenses and identify areas for savings.
Consider using cashback credit cards to earn rewards on your purchases.

Reduce Debt:

Prioritize paying off high-interest debt to save money on interest charges.
Create a budget to manage your finances effectively.

Estate Planning

Update Your Will and Trust:

Review your will and trust to ensure they reflect your current wishes.
Update beneficiary designations on your financial accounts.
Consider creating a living will and power of attorney documents.

By taking the time to conduct a thorough financial checkup, you can improve your financial health and set yourself up for a successful future.