7 end-of-year money moves to make now

7 end-of-year money moves to make now

It’s hard to believe, but 2025 is racing to a close already. That means people are already daydreaming about holidays, travel, and gifts — and probably not about more uncomfortable things, like finances.

But even though it may feel like a chore, the end of the year is precisely the right moment to consider your money. Where did you get off track in the last year? What can you do better, and what steps can you take to get there?

Whether you are looking to deal with last year’s debt, rebalance your portfolio, or make your cash work harder for you, or implement tax-savvy moves before the year winds up, an annual review can help you chart a much better course for 2026.

“As the year winds down, it’s the perfect time for a financial tune-up,” Nathan Sebesta, a financial planner with Access Wealth Strategies in Artesia, N.M., tells Current, a consumer fintech banking platform. “A strong cash position and balanced portfolio will help you start 2026 with clarity and confidence.”

So what are some smart money moves to help get next year started on the right foot? A few ideas:

Contribute to your IRA. Current annual contribution limits for these retirement accounts are $7,000 or $8,000 for those aged 50 and over. So if you are able, max out those limits and book it for the 2025 tax year. The same goes for your 401(k) or 403(b): Annual limits are $23,500, with a $7,500 catch-up provision for those over 50, so put away as much as you are able (at the very least, taking advantage of your employer’s matching funds).

Make your charity count. This is the time of year when people donate to the causes they care most about. If you do it by Dec. 31, you can enjoy the deductions when tax time rolls around in April. And here’s a new wrinkle: “The biggest item I'm discussing with my clients is that charitable contributions are probably worth more this year than next year, based on changes in the tax code,” says Mitchell Kraus, a financial planner at Capital Intelligence Associates. “I'm encouraging clients to set up Donor Advised Funds.” These are vehicles that let you take an immediate tax deduction, invest those funds for growth, and then make grants over time on a schedule of your choosing.

Tap your Flexible Spending Account. If you have put money into an FSA account — perhaps to cover out-of-pocket medical costs, for instance — the rules are often “use it or lose it,” meaning you have to spend it by the end of the year or forfeit it altogether. So make sure to do so on any number of items, such as deductibles, copayments, prescriptions, or eyeglasses.

Review your cash. When you have cash sitting in your portfolio — whether it’s your emergency savings or it’s meant for a specific goal like a down payment on a home — there’s no reason for it to be earning nothing, as is often the case with big banks. “Revisit your cash reserves,” suggests Sebesta. “Make sure your emergency fund is fully funded and earning a competitive yield in a high-interest savings account.” By doing so, you could easily start generating returns of 4% or even more, without taking on the risk of more volatile asset classes.

Rebalance. Whatever your target portfolio allocation is, you have probably strayed from that over the course of the year. So it’s a good time to get back on track with the proportions of stocks, bonds, cash, or alternatives that make sense for you. While you’re at it, don’t forget tax-loss harvesting: If you’re looking to sell disappointing stocks, book that loss by the end of the year to offset up to $3,000 of ordinary income.

Be smart about gifting. If you’re in a position to be generous with your money — to an adult child or grandkid, for instance — you might as well get the most out of it yourself. Right now, the 2025 limit, before gift taxes take effect, is $19,000.

“If utilizing the annual gift tax exclusion, complete the gift by year-end,” advises Kevin McLoughlin, a financial planner with Trio Wealth Management in Great Falls, Va. In a similar way, when it comes to college savings, “Make 529 contributions by year-end to take advantage of state tax deductions,” he says.

Trim spending plans. As enjoyable as the holidays are, it’s also the time of year when people tend to dig themselves a big financial hole. According to one survey from the financial site NerdWallet, 31% of people still haven’t paid off their credit card balances from last year’s holidays.

So be proactive and avoid loading up on debt to start 2026. That might mean staying close to home instead of taking a lavish trip, or limiting the dollar amount on gifts between friends and family, or using a year-end bonus for something smart like trimming high-interest debt. If your credit could use a bump, consider using a secured charge card for your holiday purchases, which can help you build your credit history as you spend without taking on debt, as you can only spend the amount of money available in your account.

Take all of these steps, and instead of being weighed down by the missteps of 2025, you can enter 2026 with that most valuable of gifts: A financial head start.

This story was produced by Current and reviewed and distributed by Stacker.