← BiggerPockets Money Podcast
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- [00:00]
A
As you may know, the clock is ticking on 2025. Today we're covering 20 money moves you need to make before December 31st. Or you could be leaving money on the table. Hello, hello, hello and welcome to the BiggerPockets Money Podcast. My name is Mindy Jensen and with me, as always, is my Makes Smart Money Moves co host, Scott Trench.
- [00:23]
B
Thanks Mindy. Great to discuss some table stakes moves to make before the end of the year with you today.
- [00:28]
A
Okay, Scott, let's jump right into it. It is mid November, so we still have time, but the clock is starting to tick on the end of 2025. It is rapidly approaching and we want our listeners to hit or come as close as possible to their 2025 money goals. So what are some of the things that they need to do? What do you have for me?
- [00:48]
B
First, set your tax advantaged accounts, right, those deadlines. As a reminder, don't roll over. So use them or lose them. And that's contributions to your 401k, your 403b, your 457 and your HSA plans you have to make December 31, 2025 or you lose the ability to contribute for 2025. Just as a note, your solo 401k may have different or extended contribution deadlines. So you can check with your plan provider if you have one of those accounts.
- [01:14]
A
And traditional or Roth IRA contributions you actually have until tax day. So whenever you file your taxes up to April 15 or even into October, if you do the extension, you actually have until tax day. So you may want to put pause on those so that you can contribute to to the other accounts if possible. All right, Scott, up next is spending your remaining FSA plans. Your FSA or flexible spending account is a use it or lose it plan. It is cut off at the end of 2025. So if you are not spending those dollars, you are losing them. There is the opportunity for your employer to offer you a small extension or a small rollover, but you have to check with your employer to make sure that happens. If you your employer does not, or you're just trying to spend them all anyway, you can go to FSAFeds.gov that's FSAFeds.gov to find a complete list of so many different things that you can spend your FSA dollars on. It's not just for doctor's appointments. You can use them for prescriptions, for therapy, glasses or contacts, sunscreen, dental work, first aid supplies. I use it for my contact solution. You can stock up on band aids if you Got little kids, you know you're going to go through all anyway. There are so many different expenses you can use these on. So do not let yourself lose even $1 of these FSI money.
- [02:35]
B
Love it. Let's talk about harvesting tax losses as our third move to make or gains. If you have taxable investment accounts, you can sell losing investments to offset capital gains or up to about $3,000 of ordinary income. And you can do tax gain harvesting. So if you are in a very low income year or if you're in the 0% capital gains tax bracket, for example, you might be able to sell assets, realize gains and reset your cost basis tax free. Just make sure that you avoid triggering the wash sale rule when you're tax loss harvesting. Wash sale rule means that you can't buy back the same or substantially identical securities within 61 days of selling to take a loss.
- [03:15]
A
Number four, make year end charitable donations. So this is great for reducing your taxable income and supporting causes that you care about. You can donate appreciated stock for maximum tax efficiency or create a donor advised fund if you want to bunch your donations in one year. Cash donations can always be made if you itemize.
- [03:37]
B
Number five is going to be check your withholding and your estimated taxes. So essentially if you have a big surprise every April 15th and you receive a big refund or you owe a lot of taxes every year and that's a surprise to you that you don't want or don't enjoy, adjust your withholding now to avoid penalties or surprises. So this is a simple calculation. Look up your income for the year, look how much has already been withheld from your employer and just change that withholding talking to your HR department or your manager and that can get you. I think the best practice is to get as close to zero as possible on that return. So you're withholding just the correct amount.
- [04:12]
A
Yeah, I personally prefer to owe money on tax day because if I getting a refund back I consider that to be a interest free loan to Uncle Sam and he doesn't need any more of my money than he already has.
- [04:24]
B
Yeah, and that's optimization. I don't. That's that extra bit of optimization that I don't really try to pursue. I like to owe as little as possible.
- [04:30]
A
That again is just a choice. But make sure you are making the choice, it's not being made for you.
- [04:35]
B
Absolutely.
- [04:35]
A
Number six, review your investment portfolio and compare it to your investment philosophy. This end of year time is a great time to rebalance so you are back in alignment with your investment philosophy. So look for your stock and bond allocations kind of drifting out of balance or overexposure in one company or one sector that you weren't really aware of. There are also tax efficient placement opportunities like bonds in tax deferred accounts and stocks in your taxable accounts.
- [05:06]
B
Yeah, and I would say as part of this rebalancing here, don't do this rebalancing on like December 31st or January 1st right at the end or right at the beginning of the year. Do it somewhere kind of in the weeks leading up to a right after the year ends on a random day. Right. This is best practice discussed by Frank Vasquez when he came on the show and we built a risk parity portfolio. That rebalancing act should be done on a kind of random day. Number seven here, make your Q4 estimated tax payment if needed. This is especially important if you are self employed, have a lot of income streams. You make a lot in dividends or interest or you sold assets with large gains. So if you have estimated tax payments, make sure you're making those and discuss with your CPA if you are required or should be making those estimated tax payments.
- [05:50]
A
Scott, When I was 17, I started in a job that didn't withhold taxes from me and I didn't know that I was supposed to make estimated payments. So that year everything washed out. But the next year when I turned 18, all, all of these taxes were due and I was like, what is going on? I don't have this money because I didn't know. So if you are self employed, talk to your CPA and make sure you don't need to make these estimated taxes because that is, not only do you have to make those taxes payments, but if you don't, you get a nice little penalty. All right, number eight, let's clean up that spending and create a fresh budget for 2026. Review your spending from 2025. Identify some recurring subscriptions that you don't want any longer. Evaluate your big three expenses. Your housing, your food, your transportation, and are you properly budgeting for all of those expenses? If you went over budget in any particular category, consider bumping up the amount that you're allotting yourself because it's really kind of demoralizing to see, oh, I blew my budget again. I blew my budget again. Make sure that your budget is accurate for where you're actually spending and also make sure that your spending is in alignment with your values. So if you really don't want to be spending so much on restaurants every month. Then make a conscious effort to have healthy groceries and all the ingredients meal prep so that you're available to make dinner, not having to go out all the time. Decide on next year's saving and investing goals. And here's a little bonus. You can join BiggerPockets Money's 31 day DIY financial planning challenge@biggerpocketsmoney.com 31 days. That's 31 D A Y S. So Scott and I have put together a DIY financial planning challenge where we send you an email once a day for 31 days that will get you into a better position with your finances. You'll have a better look at your finances. You'll have a better grasp over where your money's going and where you want it to go. And best of all, it's free. So go to biggerpocketsmoney.com 31day s 31days and we will see you in January.
- [08:02]
B
Yeah, looking forward to that. That's a big project Mindy and I are working on. It's just 31 emails, but those 31 emails are going to include like a personal financial statement, investment philosophy workshop, a goal setting workshop, tips and tricks to analyze all of your expense categories, variable and fixed. It's going to be a fun project. We're excited about it and we think it will help, you know, quote unquote, professionalize your personal finances. Your DIY personal finances. Number nine is check your credit report and this is free. Go to annualcreditreport.com where you can check the credit reports from all three bureaus every single week for free. I don't think a lot of people know that. Or if you haven't been paying attention for the last couple years, that is now free on a weekly basis. And you know, the first thing you should look for is going to be things like incorrect addresses, fraudulent accounts, any payment errors or any signs of identity theft. That's an easy, easy step that you can take this week before the end of the year to make sure that nothing sneaks up on you.
- [08:55]
A
Yeah, that is an excellent tip. I hope everybody starts checking in on a weekly or monthly basis. Number 10, use your remaining insurance benefits. So this is a little bit different than the FSA before your deductibles reset. Schedule your dental cleanings, your vision exams, medical checkups, especially if you've already hit your deductible for the year. See what other medical services you can get in this year before those deductibles reset. Physical therapy, mental health and therapy sessions. Really anything that you can do by the end of the year that'll set you up for a clean slate for next year. We will get into more money moves after a quick word from our sponsors.
- [09:40]
B
Support for BiggerPockets money comes from public.com you're thoughtful about where your money goes. You've got your core holdings, you've maybe got some strategic option plays on the side. You might even have a little bit of crypto. But the point is you're engaged with your investments and Public gets that. That's why they built an investing platform for those who take it seriously. On Public you can put together a multi asset portfolio for the long haul. You can trade stocks, bonds, options or crypto. It's all there and you get industry leading yields on your cash with no fees or minimums. Switch to the platform built for those who take investing seriously. Go to public.combpm and earn an uncapped 1% bonus when you transfer your portfolio. That's public.combpm paid for by Public Investing. All investing involves the risk of loss, including the loss of principal brokerage services for U.S. listed registered securities options and bonds in a self directed account are offered by Public Investing Inc. Member FINRA and SAPC. Complete disclosures available at public.com disclosures Support for BiggerPocket's money comes from Northwest Registered Agent. Your business identity is everything that shows what your business is about from what customers see to what they don't see like operating agreements, meeting minutes and compliance paperwork. Get more for your business, more privacy, more guidance and more free resources with Northwest Registered Agent. Northwest Registered Agent has been helping small business owners and entrepreneurs launch and grow businesses for nearly 30 years. They are the largest registered agent and LLC service in the United states with over 1500 corporate guides and they have real people who know your local laws and can help you and your business every step of the way. Don't wait, protect your privacy, build your brand and get your complete business Identity in just 10 clicks and 10 minutes. Visit northwest registered agent.com money free and start building something amazing. Get more with Northwest registered agent@northwestregisteredagent.com Money.
- [11:22]
A
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- [12:24]
B
Next up is a more broad one. Just revisit your financial goals. This is number 11. Revisit your financial goals. Talk about what went well, what did you overspend on? What do you want to do next year and are there any big moves in that category like moving new house, any travel, any major, major investments, any major debt payoff goals and then project a new savings target, right? Say, hey, here's what I think my annual income and annual spending are look like next year and how I want to direct any accumulation that's going to come into my life over the next 12 months.
- [12:54]
A
All right. Number 12 is prepaid deductible expenses. If you itemize if you're close to itemizing this year or you are already itemizing this year and are bunching your deductions, prepay your property taxes for next year. Prepay your January mortgage interest. Consider prepaying your medical expenses. If they'll exceed 7.5% of your adjusted gross income, this can meaningfully reduce your taxable income this year.
- [13:22]
B
Number 13 is consider a Roth conversion. This is a strategic move. If you've had lower than usual income this year or you're maybe early in your financial independence, retire early journey and in a low tax bracket or maybe you have losses related to markets being down a little bit or your investment portfolio. I guess markets are up but you know, with, with markets down, if there's any losses to harvest there A Roth conversion can be a really powerful move if you've got some some sort of killer app here in 2025. But analyze it and think about it for a moment.
- [13:52]
A
Number 14 Check your employer match timing. Some employers match your 401k contributions annually and some of them match per pay period. So if you max out your 401k in the beginning of the year, you may be missing the match contributions that they give at the end of the year. So make sure that you know your employer's match timing and make sure you're following it to get the maximum match.
- [14:17]
B
Next up, number 15 is make 529 plan contributions. 529 plan contributions in many states qualify you for state tax deductions for contributions made by year end. That's true for example here in Colorado. So even small amounts can lower your taxes. They can begin the cycle of thinking about how you're going to plan gifting to heirs or future generations. And that begins the compounding cycle of course for these 529 plans which grow tax free if they're and can be used tax free if they are used for qualifying educational expenses like college tuition.
- [14:52]
A
Number 16 verify beneficiaries and estate documents. This is quick but essential. Check your beneficiaries on your retirement accounts, your life insurance, your HSAs, your 529s. The reason is your beneficiary, your named beneficiary supersedes your will. So if you happen to pass and your beneficiary is an old one, they get the money regardless of who you named in your will. So double check that all of your beneficiaries are up to date. Make sure your wills, your powers of attorney and your trust reflect your your current wishes. Life changes fast. This takes like five minutes.
- [15:30]
B
All right, number 17 here. Max out your mega backdoor Roth opportunities. So if your employer allows after tax 401k contributions, check the plan limit and your current contributions. Push your year end dollars into the after tax bucket and then convert immediately to your Roth. If allowed, this can add thousands to your tax free retirement planning space or roth equivalent.
- [15:53]
A
Number 18 use the annual gift tax exclusion. You can give up to $19,000 per person in 2025 tax free. This is great for helping your kids or grandkids. Funding 529 plans, moving assets out of your taxable estate. Anything you can do to reduce your taxable income, your taxable estate is a win in my book. And that's per year. So $19,000 doesn't roll over till next year.
- [16:22]
B
Number 19 is review your subscriptions, auto renewals and annual charges. So before January, cancel anything you don't use. Switch your annual renewals to monthly while you're reviewing them and reassess any free trials that might have converted and cancel those if you're not going to use them. This protects your budget and avoid surprise charges next year. All right, this is our final ad break and we will be right back with more after this. Support for BiggerPocket's money comes from public.com you're thoughtful about where your money goes. You've got your core holdings. You've maybe got some strategic option plays on the side. You might even have a little bit of crypto. But the point is you're engaged with your investments and Public gets that. That's why they built an investing platform for those who take it seriously. On public, you can put together a multi asset portfolio for the long haul. You can trade stocks, bonds, options or crypto. It's all there and you get industry leading yields on your cash with no fees or minimums. Switch to the platform built for those who take investing seriously. Go to public.combpm and earn an uncapped 1% bonus when you transfer your portfolio. That's public.combpm paid for by Public Investing. All investing involves the risk of loss, including the loss of principal brokerages. Services for U.S. listed registered securities options and bonds in a self directed account are offered by Public Investing Inc. Member FINRA and SAPC. Complete disclosures available at public.com disclosures support for BiggerPockets Money comes from Northwest Registered Agent. Your business identity is everything that shows what your business is about from what customers see to what they they don't see, like operating agreements, meeting minutes and compliance paperwork. Get more for your business, more privacy, more guidance and more free resources with Northwest Registered Agent. Northwest Registered Agent has been helping small business owners and entrepreneurs launch and grow businesses for nearly 30 years. They are the largest registered agent and LLC service in the United states with over 1500 corporate guides and they have real people who know your local laws and can help you and your business every step of the way. Don't wait, protect your privacy, build your brand and get your complete business identity in just 10 clicks and 10 minutes. Visit northwestregisteredagent.com moneyfree and start building something amazing. Get more with Northwest registered agent@northwestregisteredagent.com Moneyfree.
- [18:30]
A
Thanks for sticking with us. All right, number 20 is check your insurance coverages. Use this year end time period to raise deductibles on policies that you either don't use very frequently or that you can afford to raise. Because when you raise your deductible, you lower your premium. Shop for cheaper car and home quotes, reevaluate your umbrella insurance needs. Do you have enough umbrella insurance and update business policies if your income has changed, even small tweaks can save you hundreds of dollars per year.
- [19:04]
B
Yeah, and that's one of the things we'll cover in the 31 days challenge biggerpocketsmoney.com 31days which again is that 31 day professionalize your personal finances. Email challenge is an insurance philosophy and one I would bias people towards in the fire community, especially if you're a big saver and are growing a net worth into the hundreds of thousands or maybe even millions of dollars, is to bias towards higher deductible plans like we just said, and self insure to a greater extent on those. Right? You can use that cash position to reduce premiums and overall save a ton of money over a long period of time. And a policy of annual shopping for home, auto and umbrella insurance if you choose to have umbrella, is just a wonderful way to keep those costs low. Those will sneak up on you if you don't do anything about them.
- [19:47]
A
You might get a nominal increase the first year, but then the second year it might jump a lot. And you hear these stories about how insurance premiums are going up. You're like, oh, I guess that's just what it costs now. I encourage you to shop around every single year and now is a great time to do it.
- [20:00]
B
All right. I also want to give a big shout out to Mindy, who put together many of these moves for today's episode and compiled them into a checklist of 20 moves to make before the end of 2025. This is a free PDF. You can access it@biggerpocketsmoney.com resources where we've got this new fancy resource library. You can click on it and download it for free here and check that out. We plan to fill up this library with a bunch of tools and resources over the next couple of months, including a financial planning toolkit which will include a goal setting workshop that's actually already uploaded. We'll talk about that in a future episode. Here we'll talk about personal financial statements, projection models, and of course, sample financial plans like the one we put together for Barb, who was broke at 50 and retired at 60 on a episode that was very popular for BiggerPockets money. A great one if you haven't checked that one out yet. So we're putting that together for all of the most common types of situations that we come across here on BiggerPockets money, with all the resources and projection models and personal financial statements ready to go for those types of people. And we're excited for that as our big 2026 project here.
- [21:02]
A
So Scott, what of these 20 moves are you going to be making this year?
- [21:06]
B
The most important ones for me are to make those 529 plan contributions for my two little girls, especially my second born, who needs that first contribution there. And I think that that's the really the major last one for me. I've already done most of the other items on this checklist that apply here in 2025. How about you, Mindy?
- [21:26]
A
The 529 is also on the plans for me because I actually don't have a 529 plan for my kids yet. And I realized, or somebody told me just recently that still contribute this year for my kids that are already in college and continue to pay their college tuition that way. So that's a way to reduce my taxable income. I am also looking at using some of the annual gift tax exclusion to match my daughter's income so that they can max out their Roth IRA. Because they are 16 and 18, they don't really care about retirement. Even though I'm their mom and talk about it all the time, they don't really want to hear about it. So it's not fun to put away all of your money for retirement. But I have enough to match. So I'm going to use the gift tax to give them the same amount that they earned so that they can put money into their Roth IRA and still have spending money.
- [22:24]
B
Love it.
- [22:24]
A
And of course, reviewing those subscriptions because those sneak up on me too.
- [22:28]
B
Well, should we get out of here, Mindy?
- [22:30]
A
We should, Scott. This is a lot of fun. Thank you for sharing your time with me today. And thank you, my dear listeners, for sharing your time with us too. All right, that wraps up this episode of the Bigger Pockets Money podcast. He is Scott Trent. I am Indy Jensen. Saying farewell, Snowbell.