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Here’s Your Year-End Financial Checklist

The approaching year-end offers a great time to reflect on 2014 and look forward to 2015.

It’s a good time to get organized and give some consideration to your finances. There are always changes that might be worth making to better your overall situation.

Budget

Take a look at your spending pattern for the year.

  • Did you stick to your budget?
  • Were there unanticipated expenses?
  • Did you meet your savings goal?
  • Are there areas where you can cut costs or increase your spending?
  • Where do you need to make refinements?

Review your plans and goals and establish a new budget for next year.

Related: Budgets, cashflow, and spending. Yawn.

Investments

Arrange a meeting with your financial advisor. Prepare for it by creating a list of topics to help you get the most out of your discussion.

Review your progress on your financial goals to ensure you are on the right track.

Review and rebalance your portfolio, adjust your current asset allocation as required and ensure your strategy still aligns with your financial goals.

Did you make the maximum allowable contribution to your RESP and TFSA (or as much as you had planned)?

If you turned (or are turning 71) this year make arrangements to switch your RRSP over to a RRIF or annuity before year-end.

If you are using the bucket approach to manage your income stream during retirement, it’s time to think about how you’ll top up your liquid pool of assets.

Taxes

Create your tax file now.

  • Out of pocket health-care costs.
  • Plan your charitable donations.
  • Organize receipts for tax credits and deductions such as transit fares and children’s art and fitness programs.
  • Self-employment expenses

Here’s a checklist: www.hrblock.ca/documents/tax-return-document-checklist.pdf

Realize capital gains and losses. To maximize tax advantages, use capital losses to offset capital gains, first this year, then any three preceding years or any future year.

Related: How to calculate capital gains and adjusted cost base

Employee benefits

Review your employee benefits. If you have “flex” spending for medical and dental expenses make an appointment to take care of your medical needs before they expire. Some plans can carry over from year to year, but others do not.

Understand the choices you’ve made and make sure you’re getting the full use of any benefits you are eligible for. You might want to renew your prescriptions. Some deductibles reset at the beginning of the New Year.

If you didn’t take all your vacation days this year, check with your HR department to see if you can roll them over into the next year. If not, take them now, or cash them out instead. Put this extra money aside to spend on upcoming vacation plans.

Other

Some people like to calculate their net worth at year-end. This lets you know what you need to focus on in the next year, such as increasing your savings or a more speedy pay-down of your debts.

Check your credit score or request a free credit report from www.equifax.com or www.transunion.com.   Make sure there are no mistakes.

Evaluate your insurance policies – auto, home, health, life – to make sure you’re getting the coverage and service your need.

Related: Naming an RRSP beneficiary

Is your beneficiary information updated and correct?

Conclusion

If your year-end review shows you’ve got things under control, congratulations. If you need to make changes, start putting together your plan for next year.

Checking these items off your to-do list can help you be more organized and give you a sense of accomplishment. You’ll feel in great financial control, which should help you enjoy the holidays even more – a good end to the year.

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9 Comments

  1. Dan @ Our Big Fat Wallet on November 26, 2014 at 9:14 am

    Good list. Also a good idea to look at any capital gains/losses to be incurred in 2014 to determine the best strategy to minimize taxes (ie. selling for a loss now to offset any gains)

  2. My Own Advisor on November 26, 2014 at 6:31 pm

    Same with Dan, just did some tax selling.

  3. Hank Wilson on November 28, 2014 at 12:41 pm

    My family’s checklist includes our very important goal is to make sure we have millions in our TFSA’s by the time we retire.

    This way the $2,500,000 we will have will be earning at least $120,000 tax free income or $10,000 a month income tax free.

  4. Sean Cooper, Financial Journalist on November 28, 2014 at 6:02 pm

    This is a great idea. I’ll definitely bookmark this post. I use the year end to rebalance my portfolio and determine my net worth. It’s a good way to get the year off to a good start.

  5. Mimi on November 29, 2014 at 12:35 am

    Great list! Although, I’m guilty of staying away from our household and personal budget quite a number of times this year. I’m hoping to stick more to it next year.

  6. moneystepper on November 30, 2014 at 5:51 am

    Awesome work – printed out and stuck on the wall ready for year-end. Thanks!

  7. dunny on November 30, 2014 at 1:31 pm

    This is the best list I have seen and I am inspired to report. This is my first year of full retirement so I am adjusting to the idea of spending my savings for the first time in 2015 (alternating between anxiety and confidence).
    – Budget 2014 – I use estimates as a benchmark rather than trying to restrict myself to a budget but I look for no pain places to save. I spend about $15,000 a year on food and other discretionary (everything other than housing, auto, and travel). This doesn’t seem to increase — I seem to find savings in one area while other items increase. Housing and auto are right on estimates, except R & M was less this year; food and other discretionary was more; travel was more than estimated. I spent more on clothing this year as my wardrobe needed major replenishing. For travel I estimate a reasonable amount, and then if I am on target while on the trip, I may spend a bit more here and there. Of course, when I am away, my living expenses are lower.
    – Unanticipated expenses – I started working out with a personal trainer this year and the health benefits have convinced me to that this as an essential expense from now on. I still walk, cycle, and workout on my own too. This expense is included in estimates for 2015. It would be great if this expense was tax deductible. It could result in huge reductions in government health care costs for aging seniors.
    – Income – Investment income is more than estimated so far. How long can this bull market last? My OA started this year. No consulting or employment income this year.
    – Savings goal – I am saving more than half of my investment income. My goal is to increase my Investment Accounts so that I can withstand a major market crash without cutting back on travel. I have spreadsheets projecting this with various withdrawal/savings ratios. My tentative plan is to withdrawal 50% of investment income to a maximum of $ and a minimum of $ to maintain my lifestyle and never deplete my portfolio. Ideally I want a rising glide path right to the end, but if not, I will be okay.
    – Expenses to Cut – The annual spend on Phone/Cable/Internet continues to be excessive and soon I must cut the cord on the land line and cable. I watch nearly all my TV by streaming on the internet plus I am travelling a lot. But my cell phone coverage is not great so the land line is nice to have. They get you with the bundling price.
    – Expenses Increasing – My 25+ year old vehicle will need replacing some day which will take a chunk out of the investments and increase insurance expense but reduce repair costs. Postpone until I want to take a road trip. Besides I love driving the old car.
    – Estimates 2015 – Food and other discretionary – estimate the same as last year except for the personal trainer. Also, I am not spending at home while travelling, so that saves a bit.
    – Rebalancing Stocks – I have sold what wasn’t working and I have about 10% cash. My small pension is my fixed income equivalent. In the taxable account, I took profits on several stocks early in the year but I can’t harvest any more losses. I will maximize my RRSP contribution and push the taxes down the road. I am holding on to the energy infrastructure stocks for now but I am nervous about it — selling would trigger a big capital gain.
    – Buckets and Rising Glide path – this is tricky and I am working my spreadsheets to manage my withdrawals, minimize taxes and avoid clawbacks (not close to that yet). I’ve worked out various scenarios and concluded that deferring taxes as long as possible is better than minimizing taxes by making early RRSP withdrawals. That means stretching the taxable account out for the next 7 years. I am interested in others’ thoughts/experiences on this.
    – Healthcare – a few more massage therapy treatments to squeeze in before year-end to maximize the extended benefits. New glasses before year-end.
    – Tax Filing – I have printed out receipts for the university courses that are deductible. This is a very nice deduction.
    – Net Worth – I calculate this monthly mainly for a reality check to keep my stress level down for awhile (I am not going to starve). I include principal repayment but not home appreciation.
    – Will – One of my goals for 2014 was to review my Will as my parents now both deceased, but this will be postponed again as I am off travelling again in the new year.
    – 2015 Plan – the main goal is travelling as much as possible while I can, and I will postpone the new car and home renovations until a later date. I am planning various trips for 2015 and estimating costs for those, calculating the required withdrawals from investments, and the long term impact on my portfolio.

    The low CAD is working for me now (US stocks gaining on FX alone) and low interest rates are great (I still have a mortgage) but how do you plan for the eventual changes? Assuming that significant permanent capital losses could result. Permanent is the key concern.

  8. satuk on December 15, 2014 at 5:42 pm

    What are the avenues to save tax? I have maxed out on RRSP and TFSA. I don’t have any other investments and I am single. I would rather get a refund than pay tax. How can I ensure that. Appreciate any inputs. Thanks

    • Dan @ Our Big Fat Wallet on December 15, 2014 at 7:04 pm

      Satuk, you may want to look into the charitable donation super credit. Depending on your situation you may also want to consider the northern living allowance, moving costs, tuition credits, public transit credits and medical expenses

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