6 ways to give your finances a boost before 2023

Individuals 10.21.2022 4 MIN

The end of the year can be especially hectic, which can leave little time to be proactive. We’ve outlined six simple steps you can take before the end of the year to improve your finances—all requiring just a few minutes. Let’s get started!

1. Review your budget

How well is your budget working for you? Are you expecting additional expenses in the new year (e.g., higher rent, providing for a family member, etc.)? On the flip side, maybe some of your monthly costs have gone down and you can dedicate those savings to another goal, like reducing a credit card balance. Taking a few minutes to look at your budget and make adjustments—as needed—can put you in a position to start the new year off right.

2. Establish an emergency fund

From unexpected medical expenses to the loss of a job, it’s important to have some extra cash on hand, to help you weather what life might throw at you. Ideally, you should have three to six months of living expenses built into your emergency fund. But any amount you can save now will help you in the long run, so don’t feel you should have the entire fund ready right away.

One smart strategy is to “pay yourself first.” This means having a set amount go into a savings account at the start of the month so when you pay your other bills, you also pay yourself. Learn more about “paying yourself first”.

3. FSAs—Use it or lose it

An FSA allows you to put away pre-tax dollars for qualified medical expenses. For 2022, the limit is $2,850 per employee for contributions.* Remember—the money you don’t use won’t roll over to next year. Make sure to use those dollars for expenses not covered by your medical plan, including deductibles and co-pays.

Certain over the counter medications, family planning expenses and first aid supplies can also be covered by FSA dollars, so stock up to ensure you empty your account. Not sure if an expense is eligible? Check the FSA Store’s list to find out.

Some employers do offer a grace period to use FSA dollars—connect with your benefits department first to see if you have extra time.

4. Review your beneficiaries and your estate plan

Have you made any big changes recently? Did you get married, welcome a new family member, get divorced, move to a new state, or buy a house? Now is the time to review your beneficiaries and make updates, if needed.

It’s also a good idea to spend some time reviewing your estate plan. Do you need to make a will or update an old one? Do you have enough life insurance? These updates are a way to give yourself peace of mind.

5. Maximize your tax breaks

Charitable contributions. For the 2022 tax year, you can only take the charitable deduction if you file an itemized return. With this deduction, you can deduct cash (up to 60%) or property (up to 30%), which can lower your tax bill. There’s also good news for those who give their time. You can deduct your unreimbursed gas, mileage, tolls and parking expenses while volunteering. Check the latest IRS limits for more details on the tax treatment of charitable giving.

Health Savings Accounts. HSAs are a good way to reduce your tax burden. The money you put into your HSA is contributed pre-tax in most instances. Then you use those dollars to pay medical expenses not covered by insurance, like your deductible and copays. Learn more about how these accounts work and contribution limits in our HSA FAQs.

529 Savings Plans. Save for college the tax-smart way. Contributions grow tax free and can be withdrawn tax free for qualified education expenses. Check out our guide on 529 Plans for more information.

Fund retirement. Maximize your 401(k) retirement contribution. For 2022, you can contribute up to $20,500 plus an additional $6,500 if you are 50 or older. Our beginner’s guide to 401(k) plans can help answer questions you have around retirement savings.

6. Maximize the resources available to you

Planning for the end of this year can help you start off on the right financial footing for the New Year. Check out our digital platform for financial tips and tools that can help you create a budget, build savings, set retirement goals and more!

Connect with a financial wellness coach to discuss your goals one-on-one, at no cost to you. Schedule an appointment today.

If you have Goldman Sachs Ayco as a company benefit, register, log in or download our Goldman Sachs Wellness app to learn more about this and other financial wellness topics.

*Any employee whose employer offers an FSA can contribute to it. Keep in mind: If you have a healthcare FSA, you cannot also contribute to an HSA. However, if you have a limited-purpose and/or Dependent Care FSA, you can still contribute to an HSA. If your company offers Goldman Sachs Ayco Financial Wellness as a benefit, connect with a coach to talk through your options.