Do These 6 Things Before 2024 Ends

The end of the year is fast approaching. Before we welcome in 2025, let’s make sure you close out 2024 strong so that you can hit the ground running in 2025

In today’s newsletter, we are going to cover 6 action items you should do so that you can maximize your 2024 dollars

Let’s dive in

1. Review your finances

Tally up your assets and liabilities to get your net worth. Get a full picture of where you stand financially. If you want an example of what this looks like, check out my post Net Worth Update: November 2024

Now, do you have a 3-6 month emergency fund? If not, this needs to be a priority. If so, make sure it is in a HYSA not a checking account

If you have debt, take the time to organize your debts and prioritize paying off high-interest debts with extra money from gifts or year-end bonuses

2. Take Advantage of Free Money

Did you know that 1/3 of Americans leave money on the table by not contributing to their 401(k) to not get the employer match?

If you have not opened up a 401(k) plan with your employer, call them ASAP. Most employers have a matching 401(k) program. Either your employer does a partial match (ie. 50 cents for every dollar invested) or a full match (dollar for dollar invested)

If your employer has a 401(k) plan, contribute as much up to the employer match to take advantage of free money

3. Optimize Tax-Advantaged Accounts

Make sure you are contributing to tax-advantaged accounts like IRAs and HSAs. The contribution limit for IRAs for 2024 is $7,000 and $8,000 for those 50 and older. While you can still contribute to your IRA in 2025 (which is called the Lookback Period), make sure you are on track to max it out

4. Tax Loss Harvesting

Sitting on any investment gains? Sell any poor performing stocks to offset your tax bill!

Here is how tax loss harvesting works

You sold Apple stock for a $5,000 gain. In April, you will have a $5000 capital gain tax bill

But…. your Tesla stock is down for the year, so you sell Tesla stock for a $3,000 loss

So instead of paying a $5,000 tax bill, you now have a $2000 tax bill ($5000-$3000= $2000)

***Note: Just don’t buy the same stock that you sold for tax-loss harvesting in the next 30 days as this violates the Wash-Sale Rule

5. Set a savings goal for 2025

The average American has a savings rate of 3-5%

Target a savings rate of 20-25%

If you make $3000/month. You should be saving $600 and living on $2400 each month

If you have a low savings rate, look at your budget to see where you can cut back or look at different ways to bring in more income. You could even try a No Spend Month. This is when you don’t spend money on eating out, going to the movies, buying unnecessary clothes, etc)

6. Plan Out Your Money Goals for 2025

This is my favorite thing to do at the end of the year! This is where you can dream what you want to accomplish in the next year. That could be starting that side hustle you have wanted to start. Reaching an investment account balance goal (ie. $20k invested in my IRA). Setting up a savings goal to go on a vacation or buy a new car. Or even have a debt payoff goal, such as paying off $10,000 of my student loans.

Let your mind wander and dream big

2025 is fast approaching, but let’s finish 2024 on a high note. Take stock of where you stand financially and make sure you are taking advantage of tax saving methods. Don’t forget to dream big for 2025 and let your money work for you.

Wishing you all the best in the last days of 2024

Matt Harbaugh

P.S. If you found this helpful, it would mean a lot to mean if you subscribe. My 2025 goal is to grow this newsletter to 1,000 subscribers. Thank You!