Harris: Year-End Review: Financial Decisions to Consider

By Charlestien Harris, Retired Financial Coach at Southern Bancorp

December is the final month of the year, and it offers many opportunities to make decisions that can improve your financial outlook – both now and into the new year. Several factors influence your financial well-being, and the choices you make before December 31 can lead to benefits such as a reduced tax burden, increased retirement contributions, or adjusted investment strategies.

The end of the year is an ideal time to review your financial plan and consider making changes. Below are some suggestions to help you take a closer look at your finances and possibly make adjustments for the year ahead:

1. Review your entire financial plan.

This is the first step in the decision-making process. Take another look at your original plan from the beginning of the year to now. You may not need to make changes, but reviewing your plan can help you determine whether you are still on track to meet your goals or if additional work is needed.

2. Review your charitable giving options.

Nearly 20 percent of nonprofit contributions occur in December, according to the Giving Institute, which assists nonprofits with fundraising. If you plan to donate, confirm that the charity qualifies for tax-exempt status and obtain documentation of your gift, such as a receipt or bank record. Contributions made by December 31 can be claimed on your 2025 taxes.

3. Review your credit report for errors.

Consumers are entitled to one free credit report annually from each of the three major credit reporting agencies: Equifax, Experian, and TransUnion. December is a great time to order a report and check for inaccuracies. To dispute an error, contact both the credit bureau and the company that provided the information – either in writing or online. Explain what is wrong, why, and include supporting documentation. The Consumer Financial Protection Bureau offers instructions, template letters, and more at:
www.consumerfinance.gov/ask-cfpb/how-do-i-dispute-an-error-on-my-credit-report-en-314/ 

4. Review your retirement contributions.

Many people do not contribute the maximum to their 401(k) or even enough to receive their employer’s full match. Consider increasing your contributions to maximize future benefits. You can also contribute to an Individual Retirement Account (IRA) – traditional or Roth. Both options help you prepare for retirement. Consult a certified financial planner to determine which is best for you.

5. Review your W-4 tax withholdings.

Double-check the amount withheld from your paycheck to avoid an unexpectedly large tax bill in 2026. When I prepared taxes as a VITA volunteer for Southern Bancorp, this was a common issue. Use the IRS withholding calculator to ensure accuracy. To adjust your withholding, submit an updated Form W-4 to your employer. If you reduce your allowances, consider direct depositing the extra paycheck amount into a savings or retirement account to help your money grow over time.

6. Review your Health Savings Account (HSA) contributions.

If you have an HSA, make sure it is fully funded by year-end. For 2025, the contribution limits are $4,300 for individual coverage and $8,550 for family coverage. If you are 55 or older, you can contribute an additional $1,000 as a catch-up. To qualify for an HSA, your health plan must meet IRS criteria for a high-deductible health plan (HDHP), which you can find on the IRS website. HSAs offer a triple tax benefit: contributions are pretax, earnings grow tax-free, and withdrawals are tax-free when used for qualified medical expenses.

Review, review, review! It never hurts to take a second – or even a fourth – look at your finances before the year ends. A careful review may reveal changes needed to maintain a healthy financial outlook. Some adjustments will affect your 2025 finances, while others will impact 2026, but either way, you will be glad you took the time!

For more information on this and other financial topics, email me at charlestienharris77@gmail.com or write to: P.O. Box 1825, Clarksdale, MS 38614.

Until next week – stay financially fit!

Charlestien Harris is our financial contributor, a retired financial expert with Southern Bancorp Community Partners.