10 Things to Do Before 2025 Ends

Proactive financial planning before year-end, following the Financial Order of Operations, can significantly impact future wealth accumulation, tax efficiency, and overall financial stability.

• Prioritize securing your cash reserves and ensuring they earn interest.

• Always capture all available employer-matched 'free money' and evaluate tax-advantaged contribution types.

• Aggressively eliminate high-interest debt and maximize contributions to tax-free growth accounts like HSAs and Roth IRAs.

Financial success isn't just about waiting for the new year; making strategic money adjustments before year-end can lead to substantial benefits like lower taxes and accelerated retirement savings. The Financial Order of Operations, a nine-step framework, serves as an excellent recalibration tool to ensure all necessary financial actions are addressed, from optimizing cash to maximizing tax-advantaged accounts and planning for future expenses.

Optimize Your Cash

• 00:01:35 Ensure you have adequate cash covering your highest insurance deductible and a fully funded emergency fund of three to six months' living expenses. For upcoming big expenses like a car replacement or home repairs, cash prevents desperate decisions. Additionally, make sure your cash is not sitting in low-yield accounts but rather earning interest, as it is currently easy to find options paying 3.5% to 4% interest.

Maximize Free Money

• 00:03:07 Take advantage of all 'free money' opportunities from your employer, starting with ensuring you contribute enough to receive the full 401k match. If your income is below $200,000, this employer match counts towards your 25% savings goal. Also, investigate employee stock purchase plans offering discounts or favorable pricing periods, as these are another form of free money, acknowledging the risk but also the power of these benefits.

Debt Management

• 00:07:41 Prioritize extinguishing high-interest 'bad debt' before year-end to build wealth more effectively. All credit card debt, including 0% balance transfer cards, is considered high interest due to its potential costs and risks. For auto loans, rates above 10% (20s), 9% (30s), or 8% (40s) are high-interest, while student loans exceeding 6% (20s), 5% (30s), or 4% (40s) should be prioritized for repayment, with cash always preferred for car purchases.

Tax-Free Wealth Building

• 00:12:13 Maximize contributions to tax-free accounts like Health Savings Accounts (HSAs) and Roth IRAs. For HSAs, ensure eligibility and max out contributions for the current year (e.g., $4,300 single, $8,550 family for 2025), and actively invest the funds rather than using them as a slush fund. Roth IRAs are a powerful tool for tax-free millionaire status, with annual contribution limits of $7,000 (plus an extra $1,000 for those 50+) and income phase-outs, making backdoor Roth conversions a viable strategy for higher earners.