October marks the beginning of the fourth fiscal quarter of the year. Called Q4, the period of October, November, and December is a great opportunity to take a close look at your financial health and take action to set yourself up for success in 2025. Here are 7 tips for ending the year financial fit.
1. Review and adjust your budget.
The fourth quarter is an excellent time to review your budget and spending habits. Analyze your monthly expenses over the past nine months and compare them to your budgeted amounts. Identify areas where you’ve overspent or underspent. This review can highlight spending patterns that may need adjustment. For instance, if you discover you consistently overspend on dining out, consider reallocating funds to better align with your financial goals. Additionally, anticipate any significant expenses that might arise in the last quarter, such as holiday gifts or travel. Adjust your budget to help you manage these expenses without derailing your financial plan.
2. Create or add to your emergency fund.
If you’re not already allocating money monthly to an emergency fund, now’s the time to start. An emergency fund provides financial stability and security to handle unexpected situations, such as job loss, unexpected medical bills, or unplanned auto or home repair. Knowing you have a financial safety net helps relieve stress and can prevent upending your monthly budget, forcing you to take on debt. Include contributions to your emergency fund as you review and adjust your annual budget. Once you’ve decided on the amount to contribute, take the next critical step – open an emergency fund account or contribute to your existing one. Our Rainy Day Savings account has no minimum balance requirement, so you can start small and increase your contributions as you go. You’ll earn a nice 3.04% APY* on balances up to $2,000. No Debit Card or checks are issued to help you avoid dipping into the account for splurges. You can make two free withdrawals per calendar year.
3. Plan for holiday spending.
The holidays are approaching fast. This time of year often brings increased spending on gifts, travel, and festive activities. To avoid falling into the trap of overspending, create a detailed holiday budget. List all potential expenses, including gifts, travel costs, decorations, and special meals. Be sure to include family gatherings at your home, which may require a higher food bill, purchasing extra furniture, and even taking care of delayed home maintenance. Allocate a specific amount for each category and stick to it. One effective strategy is to set aside a portion of your monthly income in the months leading up to the holidays to cover these expenses. This approach can help spread the financial impact over time, making it easier to manage. Consider alternatives to expensive gifts, such as handmade items or experiences, which can be more meaningful and budget-friendly. Our Holiday Club account can ensure the season is bright and on budget. You’ll earn a festive 2.00% APY**, plus there is no minimum balance or monthly fees. The sooner you open and start making monthly contributions to the account, the greater your balance will be for next year’s holiday season. You’ll receive your year’s savings in early November, just in time for holiday expenses.
4. Maximize retirement contributions.
The end of the year is a great time to review your retirement savings strategy. If you haven’t already maximized your contributions to retirement accounts such as a 401(k), IRA, or company match, now is the time to consider doing so. For traditional individual retirement accounts (IRA) and 401(k)s, contributions are tax-deductible up to specific limits, which can lower your taxable income for the year. Increasing your contributions before the year ends, allows you to take advantage of this tax benefit and boost your retirement savings. If you’re unsure how much you can contribute, consult a financial advisor who can provide personalized advice based on your income and retirement goals, or visit the IRS website. If you don’t already have an IRA, we can help. We offer a Traditional IRA, Roth IRA, and a SEP IRA. Our High Yield IRA Savings Account is paying 3.50% APY† with no fees or balance tiers. Please consult your tax advisor regarding tax consequences and your specific situation.
5. Check your insurance policies.
Year-end is a good time to review your insurance policies if you’re not doing so when your policies come up for renewal. Whether it’s health, auto, home, or life insurance, make sure your coverage still meets your needs. Review your current health insurance plan and consider if it’s still suitable for your health needs and financial situation. If you’re covered under an employer plan, check if there are any changes for the upcoming year during open enrollment periods. Switching health plans can lower your monthly premiums, but review any changes carefully. Switching plans or health insurance companies usually means different deductible limits and out-of-pocket costs for such things as office visits. For auto and home insurance, evaluate whether your coverage amounts and deductibles are still appropriate. If you’ve made significant life changes, such as buying a new home or getting married, update your policies to reflect these changes. If you need help paying for your auto or home policies, our upcoming Premium Purchase Loan could be right for you. This loan can be used to pay your auto, home, or life insurance loan with Farmers Insurance and helps you avoid a lapse in coverage. You can borrow up to $40,000, and the rate of 17.50% APR‡ can save you money over putting the premium on a credit card. This loan will be available soon, call us or visit this website in November for updates.
6. Set financial goals for the new year.
Reflecting on the past year’s financial performance is crucial for setting goals for the coming year. Analyze your achievements and setbacks, and use this insight to establish new financial goals. These might include saving for a major purchase, such as a home or car, paying down debt, or increasing your investment contributions. Setting actionable goals can help you stay focused and motivated. Create a plan with specific milestones and deadlines to track your progress throughout the year. For example, if your goal is to save for a vacation, calculate how much you need to save monthly to reach your target by a specific date. If you need help achieving your financial goals, start by increasing your money know-how. Our Financial Wellness Check is an easy online review that only takes a few minutes, it’s like a physical for your finances. After you submit your answers, we’ll connect with you in a few days to identify ways for you to grow wealth more efficiently and avoid red flags. The review is free, and there’s no obligation or selling. After you complete the Financial Wellness Check, visit our Financial Education Center, which has easy-to-follow, jargon-free videos to help increase your money smarts. Topics include budgeting, saving, credit scores, and more.
7. Evaluate your investment portfolio.
As you approach the end of the year, take time to evaluate your investment portfolio. Assess whether your investments are aligned with your financial goals, risk tolerance, and values. If market conditions or your circumstances have changed, you might need to rebalance your portfolio. This could involve shifting investments between asset classes or adjusting your risk exposure. Regular portfolio reviews ensure that your investment strategy remains on track and adapts to any changes in your financial situation or market conditions. A simple way to keep pace with the financial markets is our Variable Rate Certificate, which, at the time of this writing, is paying 5.75% APY1. The yield for this account goes up or down based on the financial markets. If interest rates rise, so will this account. If they fall, you could still earn more than a traditional fixed-rate investment. All you need to open this 36-month term account is $1,000. Consult with a financial advisor and a tax professional to get expert guidance on rebalancing your portfolio and making informed investment decisions
Final thoughts.
By implementing these seven tips for ending the year financial fit, you can manage your money more effectively and help set yourself up for financial success in the new year. Regularly reviewing and adjusting your financial plan helps ensure that you stay on track with your savings and retirement goals and can navigate any challenges. If you need help or have any questions about any of the accounts we’ve discussed, call us at 800.877.2345.
*APY = Annual Percentage Yield. Rates are subject to change at any time. Limit one Rainy Day Account per qualified membership. Rainy Day Savings is an interest earning savings account eligible for 3.04% APY interest on balances up to $2,000 and the standard Membership Savings rate on balances over $2,000 when funded via recurring ACH deposit or other qualifying external funds. Dividends are calculated by applying a periodic rate to the Average Daily Balance in the account for the Dividend period. Interest earned will be credited to the account at the end of the statement period. This account is limited to two withdrawals per calendar year, each withdrawal in excess of this amount will incur a $20 excessive withdrawal fee that must be paid at the time of the withdrawal. This account does not qualify for withdrawal access via debit or check and does not support transactions originating via VRU, online banking, mobile banking, or ATMs. Withdrawals can be made in person at a Credit Union branch or by calling us at 800.877.2345. This account does not qualify for overdraft protection. Account holder must be a member with a regular share account who is in good standing. Current interest rates and the annual percentage yield may be found at the Credit Union’s website, may be verified at a Credit Union Branch or by calling 800.877.2345. Interest rates earned and qualifying dollar amounts for interest earned are subject to change at any time. APYs and eligibility criteria are subject to change at any time. Fees may reduce earnings.
**APY = Annual Percentage Yield. APY is the annualized rate based on a compounding period of one year. When the deposited money earns dividends and the accumulated dividends starts earning dividends as well, we are talking about compounding. Fees could reduce the earnings on an account. All yields except Certificate yields are subject to change retroactively to the beginning of the month.
†APY = Annual Percentage Yield. APY is the annualized rate based on a compounding period of one year. When the deposited money earns dividends and the accumulated dividends starts earning dividends as well, we are talking about compounding. Fees could reduce the earnings on an account. All yields except Certificate yields are subject to change retroactively to the beginning of the month. Consult your tax advisor regarding tax consequences and your specific situation.
‡APR = Annual Percentage Rate. APR is the annual rate of interest that is paid on an investment, without taking into account the compounding interest within that year. Rates are subject to change at any time.
1APY = Annual Percentage Yield. APY is the annualized rate based on a compounding period of one year. When the deposited money earns dividends and the accumulated dividends starts earning dividends as well, we are talking about compounding. Fees could reduce the earnings on an account. All yields except Certificate yields are subject to change retroactively to the beginning of the month.
Variable Rate Certificate 36-Month Term (Variable Rate Certificate) No additional deposits accepted (other than dividends) during certificate term renewals. Fund your account with a minimum deposit of $1,000. Annual Percentage Yield (APY) rate is based on current Federal Funds Rate Upper Limit of 5.50% APY plus a 0.25% spread. Yield rate is 5.75% APY. Base rate is 5.60% APR. Rates are subject to change on the first day of each calendar month following account opening. No bonus dividends (no jumbo bonus and no DDEP bonus). At maturity, account renews into the same product: Variable Rate Certificate 36-Month Term renews into a Variable Rate Certificate 36-Month Term; Variable Rate IRA 36-Month Term renews into a Variable Rate IRA 36-Month Term. Early withdrawal penalties may be imposed and fees could reduce earnings and/or principal. APY interest rate will follow the Federal Funds Rate Upper Limit. Rates are subject to change on the first day of each calendar month following account opening. Rates are subject to change without notice. Rate may not be combined with any other rate increase/bonus. Regular share certificate requirement on a 365 day basis. IRAs qualify for Variable Rate Certificate. Minimum balance to obtain the available rates for Variable Rate Certificate 36-Month Term advertised annual percentage yield is $1,000. Fund your account with a minimum deposit of $1,000. Early withdrawal penalties may be imposed and fees could reduce earnings and/or principal. Refer to our TISA Disclosure for terms and conditions. Federal regulations require dividends be paid from available earnings; dividends are contingent upon this regulation.
