Money Moves to Make Before the End of the Year: It’s About Optimizing Your Savings

Now is the perfect time to take control of your finances and prepare for a financially sound 2025. No matter your age or stage in life, there are a number of strategies that can help you make the most out of your hard-earned money in the last few months of this year.

Here’s our list of the top financial moves to make before the end of 2024.

Put Your Savings in Buckets

If you have multiple savings goals, you might want to set up savings buckets before 2024 is over. Buckets are essentially digital envelopes that let you divvy up your money to save for a variety of goals.

You may have one bucket for a new car, and another one for a kitchen remodel or home down payment, for example. Not all online savings accounts include this perk, but several do, including the following:

• Ally Savings
• Betterment Cash Reserve Account
• Capital One 360 Performance Savings
• SoFi® Checking and Savings Account
• Synchrony Savings

Optimize Your Savings by Opening a CD

Since rates will likely go down in the fall season, now is the best time to stash some money into a certificate of deposit (CD). By doing so, you can capitalize on these good rates before it’s too late. Fortunately, there are short and long-term CDs available, so you can open one (or a few) that meet your particular savings goals.

The table below shows how locking a lower rate now will make a huge difference in your guaranteed returns if you invest $5,000 in a 2-year CD. As you can see, it can lead to hundreds of extra dollars in your pocket.

Find the Best CD Rates

Hundreds of banks offer CDs, and there’s fierce competition among them to offer the best rates. Use our MoneyRates CD rate-finder tool below to sort through the list and find a CD that fits your financial goals.

Maximize Your 401(k)

With a 401(k) plan, you can turn your dream of retirement into a reality. Even if you’re young and retirement is decades away, now is a great time to contribute to your account. If you have an employer-sponsored 401(k), you may contribute up to $23,000 in 2024 or an additional $7,500 for a total of $30,500 if you’re 50 or older. The limits for a Solo 401(k) for self-employed individuals are $23,000 for employee contributions and up to 25% of compensation for employer contributions.

Ideally, you’d max out your 401(k), but if you can’t, make sure you contribute enough to take advantage of your company match if you have one. “Contributions to 401(k) accounts are often tax-deductible, which can reduce your taxable income for the year and give a boost to your retirement savings,” says Kristy Kim, financial expert and founder at TomoCredit.

Review Your Health Insurance Plan

By the time December rolls around, you might already meet your health insurance deductible. If this is the case, it’s wise to receive any routine care services or elective procedures that might cost you more once 2025 hits.

You may want to get up to date on immunizations, schedule a skin evaluation with your dermatologist, or finally undergo that colonoscopy you’ve been putting up. Now is also a great time to evaluate your policy and determine whether you need or want to modify it to save money.

Check Your FSA and Spend It If You Need To

If you have a flexible spending account (FSA), you’ll save money if you spend the pre-tax dollars before the end of the year, as it’s a “use it or lose it” policy.

Otherwise, you may lose the funds unless your employer offers a grace period. “Remember, FSAs aren’t just for doctor visits or prescriptions — you can use them to purchase a variety of items, such as oral care devices, massage guns, or even wearable health monitors,” explains Kim. If you have a health savings account (HSA), note that your unused money will not go to waste, and you can expect it to continue to grow tax-free.

Make Charitable Donations

As Thanksgiving approaches, it’s the perfect time to start thinking about giving back to a cause or organization you value. “In our family, it’s a tradition to make donations to support local food shelters,” says Kim. Keep in mind that charitable donations can also provide tax deductions, helping to lower your taxable income.

Be sure to double-check that the charity is IRS-approved and save your receipt for tax season. The tax-exempt organization search tool on IRS.gov will inform you whether a charity is eligible for tax-deductible donations. Keep in mind that any gifts of $250 or more will require a receipt that lists the gift amount and a description.

Plan for Holiday Spending

The holidays are coming up, and so is the potential for related financial stress. Depending on your situation and priorities, you may have to spend money on travel, gifts, decorations, special gatherings, and related expenses. That’s why it’s wise to start planning now.

“For example, booking holiday flights on a Tuesday often yields better prices than booking on the weekend,” explains Kim.

Invest in Education

If you’ve considered going back to school for another degree or enrolling in an academic program, now might be the time to contribute to a 529 plan or other educational savings accounts.

You may also want to contribute to your children’s upcoming college education. “These contributions grow tax-free when used for qualified educational expenses and may offer state tax benefits as well,” says Kim.

Review Your Will and Estate Plan

As the year comes to a close, it’s a good idea to review your will and estate plan. Make sure your documents are up to date and reflect your current wishes, especially if you’ve experienced significant life changes.

These may include the birth of a child, a move, a different job or employment situation, or significant health changes. “And for those of you who are superstitious, it’s not morbid, it’s good financial planning,” explains Kim.

Revisit Your 2024 Resolutions

Did you impulsively sign up for a gym membership at the start of the year? January is a peak time for gym sign-ups, but only 30% of users actually use their membership regularly.

“Take this time to cancel any unused memberships and revisit your 2024 resolutions to rebalance your health goals,” says Kim. Your goal in 2025 should be to only spend money on health initiatives you’ll actually use.

Stay Ahead of Inflation

There’s no denying that inflation is an issue in 2024 and will likely continue to be one in 2025. You may have noticed increases in things like grocery expenses or utility bills. Simply put, your money just isn’t worth as much as it was a short time ago.

“If you want to prevent your money from losing value, you need to do something that may allow it to grow at the same rate of inflation or higher. Saving and investing have the potential to do that,” explains Kim. Explore various high-yield savings accounts, CDs, and other savings vehicles.

Prepare for Tax Season

Tax season can be overwhelming, but it doesn’t have to be. A bit of preparation can go a long way in reducing stress levels and streamlining the filing process. “Organize and prepare all your financial documents, such as receipts, 1099s, and W-2s, now to make your upcoming tax filing process smoother. Doing so will also help you avoid the last-minute rush,” says Kim. If you have a complicated tax situation or simply need some guidance, don’t be afraid to consult a tax professional.

Take Control Now and Start 2025 Financially Strong

By taking advantage of these financial tips, you can begin 2025 on the right foot. With a bit of planning, patience, and creativity, you will be able to meet (or even exceed) your financial goals in the upcoming new year and beyond.