Year-End Financial Review for Individuals

November 8, 2023
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2023 is almost over. As the year comes to an end, it’s the perfect time to review your finances and adjust your financial plan for 2024 and beyond. In-depth financial reviews should happen at least once a year, and there’s no better excuse to do it than now.

This week, we will be focusing on year-end financial review steps for individuals. If you are a business owner, stay tuned next week for more tips and information.

When it comes to assessing your financial health as an individual or family, here are some of the key steps you should be taking before the end of the year:

Look at the Big Picture

You likely already have a general idea of your financial situation. You may be living comfortably, paying your bills, avoiding major debts and putting money away toward savings or investments. Or, you may be struggling in certain areas. Take a step back and review your financial health on a general basis. This will help you start focusing in on certain areas of improvement, as well as defining future goals.

Think About Your Goals

What are your financial goals for 2024? Where do you want to be in another 5-10 years? Is retirement in the near future, and are you financially ready for it? As you assess your current financial situation, you should be thinking about your next goals. Knowing what you want to accomplish next year (or further into the future) can help you create a more focused financial plan to achieve those important goals and milestones.

Tax Planning

It is always smart to review your tax plan before the calendar year comes to an end. There may be some steps you can take now to improve your tax situation for 2023. There could be new tax codes changing in 2024 that directly affect your tax plan. Make sure you are tracking all your tax deductions and implementing strategies that can reduce your tax liabilities. You might want to consider tax-free gifting to family members and/or charitable contributions that can reduce your taxable income for the year (especially if it gets you into a lower tax bracket). Consider contributing more to your retirement accounts or setting up tax-advantaged accounts for health savings, college expenses, etc. Set aside some funds if you think you might owe taxes this year, or take strategic steps to ensure the biggest possible tax return when tax season rolls around.

Dig Into the Details

You have the big picture in mind and you have specific goals laid out. Now, you can start looking into the finer details of your financial plan or wealth management strategies. Look for areas of improvement. Where can you be saving more money? Which investments are performing and which are not? Where are you doing well or struggling? How can you minimize financial risks? Digging into the details can help you adjust and refine your plan heading into next year.

Be Objective

One of the biggest challenges of financial planning is being objective about your own financial wellbeing. Most of us are a little biased when it comes to our own finances and strategies. Proper long-term financial planning requires an individual or family to take a step back from time to time. You have to look at everything objectively in order to make smarter moves. Don’t let yourself get in the way!

This is when it helps to have a trusted financial advisor on your side who can provide an objective perspective and proven financial guidance when it comes to financial planning, tax planning, estate planning and wealth management. Contact Illumination Wealth today to schedule your year-end financial consultation with on of our leading advisors. Let us help you make the most of your financial plan for 2023, 2024 and many years to come!