While the past twelve months have brought some economic victories for the United States, a large portion of Americans remain less than thrilled.
As 2024 nears its finale, soaring prices continue to tighten wallets nationwide — a situation aggravated by tariffs on goods imported from Mexico, Canada, and China imposed on the administration’s first day, potentially driving up costs on everything from sneakers to vehicles. On the campaign trail, former President Trump pledged to roll back some of these tariffs, eliminate taxes on certain income streams, and slash corporate tax rates.
With 2025 looming as somewhat of a financial wild card, now’s an opportune moment to reflect and strategize for the months ahead. Whether your ambition is to wipe out debt, fortify your rainy-day fund, draft a budget from scratch, or diversify your portfolio, Bankrate has your back. Greg McBride, CFA, Bankrate’s Chief Financial Analyst, offers a comprehensive checklist designed to launch you into the next year with fiscal confidence.
Snapshot of Bankrate’s Late-2024 Insights
- Emergency Savings Shortfall: Thirty-three percent of Americans reported having less tucked away for emergencies in September 2024 compared to January.
- Credit Card Balances Persist: Half of U.S. credit card owners carried balances month-to-month as of mid-2024, a rise from 44% at the start of the year.
- Financial Security Wanes: Just one-quarter of Americans feel completely financially secure, slipping from 28% last year, while 30% express a bleak outlook on ever achieving full security, up from 26% previously.
Bankrate Data Central
On a weekly basis, Bankrate rolls out exclusive surveys, research, and interest rate updates that paint a data-rich picture of the financial health and habits of Americans—covering everything from credit card debt and homeownership to insurance, retirement, and beyond.
1. Rethink Your Budget and Spending Patterns
Given the ongoing economic flux, it’s likely your monthly budget and spending behaviors have shifted. This makes year-end a perfect trigger to reassess your financial game plan.
2. Evaluate Your Debt Repayment Trajectory
“How does your current debt stack up compared to January’s starting line? If you’ve chipped away steadily, congratulations. If the opposite’s true, it’s time to craft a decisive plan for tackling debt in the coming year,” advises McBride.
Boost your debt payoff efforts by hunting for additional income streams—even short-term gigs—and funneling those funds directly toward your balances. For credit card debt, exploring a promotional 0% APR or other low-interest offers could be a smart move. If you’ve taken advantage of these recently, that’s perfectly fine—they’re designed for exactly this purpose. Now, mark your calendar for December 31st; that’s your final cutoff to make these changes.
3. Consider Roth IRA Conversions
If you’re fortunate enough to have the means, converting pre-tax retirement funds into a Roth IRA might be worth exploring.
Do keep in mind that such conversions trigger taxes on untaxed contributions, so connecting with a tax professional is a must,” McBride cautions.
While contributing directly to a Roth IRA has income limits, there are no such barriers for converting traditional retirement assets into one.
4. Adjust and Rebalance Your Portfolio
Market swings over the past year have created winners and laggards in your investment lineup, potentially skewing your asset allocation from its original design.
“Year-end is prime time to recalibrate your mix of stocks, bonds, cash, and alternative holdings. That means trimming back those winners and padding the underperformers,” says McBride. “It’s a smart way to lock in gains and lean into the timeless wisdom of buying low and selling high.”
5. Double-Check Your Beneficiary Designations
Ensuring your accounts have up-to-date beneficiaries is crucial to guarantee your assets go to the right people. The IRS also takes note of these designations, which can impact estate and tax outcomes.
6. Don’t Forget to Use Your Employer Benefits Funds
If your workplace offers benefits accounts—like flexible spending accounts—review your balances. Many have a “use it or lose it” deadline, often by December 31, though some allow a grace period extending into mid-March.
“Failing to maximize these funds means leaving money on the table, so plan accordingly,” McBride advises.
7. Complete Your Open Enrollment on Time
Typically kicking off in the final quarter, open enrollment lets you pick or adjust your employer-sponsored benefits for the year ahead. Missing the window often locks you into last year’s options—or worse, leaves you without coverage.
“Take this chance to update your status—for instance, adding or dropping spouses or dependents—and consider flex spending accounts for health, childcare, or transit expenses. Paying with pretax dollars is like grabbing an instant discount equal to your tax bracket,” McBride points out.
8. Monitor Your Credit Health Regularly
Free credit scores provided by many services might not match your official credit reports exactly, but they serve as a handy, no-cost way to stay on top of your credit standing.
9. Aggressively Tackle Credit Card Debt
Despite the Federal Reserve easing interest rates this year, credit card APRs haven’t budged much. A solid rule is to chip away first at the balances with the steepest interest charges.
10. Leverage Credit Card Perks and Rewards
Are you leaving money on the table by neglecting your card benefits? From lucrative sign-up bonuses valued at $200 to $900 to ongoing rewards, tapping into these can boost your savings in multiple ways.
Additionally, tools that prequalify you for credit offers without dinging your credit score simplify selecting the right card for your needs.
11. Review Your Insurance Coverage and Costs
Now’s a smart time to examine your insurance policies to confirm they still fit your situation. Inflation has nudged premiums upward, reflecting pricier claims due to increased labor and materials costs.
You might also want to revisit your deductible. If your finances have shifted, a lower deductible might be more manageable—or if you’ve built a cushion, increasing it could reduce your premium expenses.
“Shop around to find competitive rates. Don’t assume all carriers hike prices the same way year after year,” McBride recommends.
Looking Ahead: Navigating Economic Uncertainty
The U.S. economy has bounced through several years of volatility, and the road ahead promises more unpredictability. Still, getting a firm grip on your personal finances equips you to stride confidently into 2025 with security and clarity.
Amid the hustle of building next year’s budget, remember to pause and acknowledge your achievements over the past year. Every step forward in financial wellness is a leap toward a more stable future.