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Investing / December 19, 2018

Your 2018 Year-End Personal Finance Checklist

To help you wrap up 2018, we’ve put together checklist of important tasks you should consider before the new year.


As the year comes to end, most of us are thinking about the holidays — the shopping, the parties, the travel. It’s human nature to get distracted and place thinking about your personal finances on hold. However, this is a critical time to get organized and practice some good financial hygiene to set yourself up for a more productive 2019, especially at tax time. To help you make some meaningful decisions, we’ve put together a checklist of important tasks you should consider before the new year.

The basics

  • Review your spending and set up automated savings: Automate your savings to your emergency fund and your investment accounts to take the pressure off of you to save regularly.
  • Pay down your credit card debt: Credit cards typically charge as much as 18% on your outstanding balances, so paying off your debt would be like getting a risk free 18% return.
  • Top off your emergency fund: Everyone’s situation is different. Find out how to build the emergency fund that’s right for you.
  • Pay down your student debt: You should consider paying down or refinancing your student debt if it charges an interest rate of 6% or more.

Your job

  • Contribute to your 401(k) account: Contribute as much to your 401(k) account as your employer is willing to match.
  • Roll over your old 401(k) into an IRA: If you recently changed jobs or are considering changing jobs, you should consider rolling over your 401(k).
  • Spend down your FSA: If you have an FSA, you may want to spend the bulk of it in case you aren’t able to carry it over to next year.
  • Don’t exercise your stock options if you can wait: Waiting until the new year means you’ll defer the tax you owe from exercising your options until the 2019 tax year.
  • Review our list of 2019 Career-Launching Companies: If you’re thinking about changing jobs next year, we’ve put together a list of 150+ companies that we believe have enough momentum to become successful businesses — which in turn will give you access to the insight and experience you need to propel your career forward.

Your family

  • Review your insurance policies: Now is a good time to consider whether any major life changes might mean the need for insurance and review with parents or elders their own coverage.
  • Consider a 529 college savings plan account for your kids: When it comes to planning for your child’s college education costs few things have the potential to prove as financially rewarding as enrolling early in a 529 and growing your savings tax free.
  • Superfund your 529 college savings plan: Superfunding a 529 offers significant benefits both in terms of objective savings results, as well as from a behavioral finance perspective.

Your taxes

  • Harvest your losses to lower your tax bill: Tax-loss harvesting is a method that allows you to maintain the risk and return characteristics of your portfolio and generate losses that can be used to reduce your current taxes.
  • Give a tax-deductible charitable contribution: Now is a good time to donate to a cause you believe in and simultaneously benefit from it on your 2018 taxes.
  • Claim your residential solar energy property credit: The credit for solar electric property and solar water heating property is available for property placed in service through December 31, 2021, based on an applicable percentage here.

Our thanks

As 2018 comes to an end, we want to sincerely thank all of our clients who trust us every day with their hard earned money. We promise to continue to deliver value to you in 2019 and beyond. In the meantime, happy holidays!

Disclosure

Wealthfront Advisers LLC (“Wealthfront Advisers”, the successor investment adviser to Wealthfront Inc.) is an SEC-registered investment adviser and a wholly owned subsidiary of Wealthfront Corporation (formerly known as Wealthfront Inc.). Brokerage products and services are offered by Wealthfront Brokerage LLC (formerly known as Wealthfront Brokerage Corporation), member FINRA / SIPC, and a wholly-owned subsidiary of Wealthfront Corporation. Please see our Full Disclosure for important details.

Nothing in this communication should be construed as an offer, recommendation, or solicitation to buy or sell any security. Wealthfront and its affiliates do not provide tax advice and investors are encouraged to consult with their personal tax advisors. All investing involves risk, including the possible loss of money you invest, and past performance does not guarantee future performance. Wealthfront and its affiliates rely on information from various sources believed to be reliable, including clients and third parties, but cannot guarantee the accuracy and completeness of that information.