Year-End Financial Review Checklist

Couple looking at laptop

A sprinkling of mini-pinecones, fresh-cut mistletoe, and red berry branches can add the finishing touches to your holiday decor. While seasonal decorations can warm our spirits like a hot mug of cocoa, nothing can put the big red bow on 2020 like an end-of-year financial review. Before the clock strikes midnight on New Year's Eve, use this checklist to set yourself up for a prosperous 2021!


✓ Review your paychecks.

If you got married, welcomed a new baby, adopted a child, bought a home, or experienced changes to your household income, you might need to adjust your federal income tax withholdings. If you experienced a major life event in 2020, you may need to submit an updated Form W-4 to your employer. Use the IRS Tax Withholding Estimator to prevent an unwelcome tax bill in April.

✓  Check your credit history reports.

Visit and order free copies of your credit history reports from the three major credit reporting bureaus: Equifax, Experian, and TransUnion. Review each report for errors. Incorrect information on your credit reports can lower your credit score. Follow each bureau's dispute policy to have any inaccurate data removed from your credit file.

✓  Confirm your Flexible Spending Account (FSA) balance.

If you're not sure whether you can carry forward your FSA balance or if you have use it before 12/31, ask your plan administrator. Some FSA plans require you to use the funds before year-end or forfeit the balance. While the Internal Revenue Service has temporarily relaxed the "lose it" portion of the plan due to COVID-19, there may still be a carryover limit or other restrictions.

✓  Find out if you're paying too much for insurance.

You might be overpaying for auto, home, or life insurance. The only way you'll know for sure is by comparing similar policies. Consider switching policies if you find one that provides adequate coverage at a lower cost. 

✓  Gauge your emergency savings.

For many years, financial experts have recommended saving three to six months of living expenses to cover bills in the event that you lose your job. More recently, the recommendation has changed to saving enough money to cover six to nine months of living expenses. Increase your emergency savings by temporarily reducing costs and redirecting those funds into a designated savings account.

✓  Enroll in Digital Banking.

Sign up for Digital Banking  and  manage your money from anywhere, anytime.. From Bill Pay to remote deposit, to payment and transfer options, Digital Banking can help streamline banking in the new year. Plus getting your  bank statements electronically can help keep you organized.

✓  Keep your receipts.

Charitable giving often increases during the holiday season. If you gift a charity, hold on to the receipt since you might be able to use it to lower your tax liability. 

✓  Update your critical documents.

Records include your will and insurance policies. You may want to change the beneficiaries if your household size or earnings changed in 2020. Events that warrant a review include marriage, divorce, and the birth or adoption of a child. Keeping these documents up to date ensures your family is taken care of should you pass away.

✓  Tally your debt. Gather your credit card and loan statements.

Add up your account balances and commit to reducing your debt by making more than the minimum payments and limiting further borrowing. Lingering debt can make it tougher to achieve other financial savings goals. 

✓ Review the deposit history of your 401(k) and other investment accounts.

Did you hit your savings target for 2020? If not, consider adjusting contributions to get back on track. Use a savings goal calculator to determine how much you need to save to meet your goal.

✓  Speak with a knowledgeable financial advisor.

Schedule a no-cost, no-obligation consultation with an LPL Financial Advisor. They can review your specific situation and recommend additional ways to strengthen your financial position.

An end-of-year financial review can help you start 2021 on the right foot. Commit to enhancing your financial knowledge with the help of Credit Union of Colorado's personal finance blog. We publish articles on various topics all year long to help you set and achieve your financial goals.

Article by: Tracy Scott