While little ones are counting down the days until they can open their holiday presents, many adults are counting the days until they can close the book on 2020. It's understandable. But before you start ushering in the new year with noisemakers and confetti poppers, use this checklist to wrap up financial loose ends.
Your End-of-Year Financial Checklist
- Order free copies of your credit reports from AnnualCreditReport.com. Review them for accuracy and follow each credit bureau's dispute procedures to remove incorrect data. Erroneous information on your credit reports can lower your credit score. Note that your free credit reports will not include your credit score. If you would like, our credit experts here at Hanscom FCU can pull both your report and your score for free, review them with you, and discuss strategies you can use to raise your score.* Contact our Member Relations team at 800-656-4328 or here.
- Review auto, home, medical, and life insurance policies to ensure coverage amounts meet your current needs. Too much or too little coverage can harm your finances. Paying for more insurance than you need means there's less money in your budget to achieve your financial goals. Being underinsured means you might have to pay more out-of-pocket than you can afford. And neither situation is really desirable.
- Check your IRS tax withholdings. Did your paycheck change this year? If so, use the IRS Tax Withholding Estimator to ensure enough money is withheld from each paycheck. If too little is deducted, you might be in for an unwelcome tax surprise on April 15.
- Update your will and insurance policy beneficiaries if you experienced changes to your household. Marriage, divorce, and the birth or adoption of a child should trigger a review of these critical documents.
- Confirm that the individual(s) designated as your Power of Attorney and/or Health Care Proxy are still the ones you want to handle your financial and health care decisions. If you've yet to name these individuals, don't delay. They act on your behalf if you're seriously injured in an accident or an illness prevents you from handling these matters yourself.
- Review your retirement accounts. Are you meeting your savings targets? If not, plan on adjusting your contributions in the new year.
An end-of-year financial review is the first step to a solid start in 2021. Commit to sharpening your personal finance knowledge by following Hanscom FCU's MoneyWisdom blog. Weekly posts cover a variety of topics that can improve your financial well-being all year long.
Happy New Year!
*Note that Hanscom FCU's Credit Score and Report Review requires a hard pull on your credit, which will temporarily reduce your credit score.
When you're doing your financial review, take a look at our Money Management Planner to help you stay on track in 2021. Download it for free today!
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