Year-End is a pivotal time for financial planning, whether you’re managing a business or focusing on personal wealth. Reviewing key financial areas now can help you save on taxes, optimize cash flow, and set clear goals for the coming year.
Here’s a guide to the essential steps I recommend for my clients—business owners and non-business owners alike—to close out the year strong.
Understanding your financial health is the foundation of effective planning. Business owners should review income statements, balance sheets, and cash flow reports, while non-business owners should assess personal cash flow, income, and expense patterns over the past year.
This process helps:
✅ Identify overspending and potential savings.
✅ Spot revenue trends or opportunities to increase income.
✅ Confirm that you have sufficient cash reserves for the new year.
Action Plan: Set a time to go over your financials, either with me or your accountant, to identify cash flow improvements and better budgeting opportunities.
Year-end is a critical time for maximizing tax savings. For both business owners and non-business owners, certain strategies can lower taxable income and set you up for future tax benefits:
Roth Conversions: For those with lower income this year or expecting higher tax brackets in the future, converting traditional retirement accounts to Roth IRAs can be a smart move.
Expense Timing and Income Shifts: Business owners on a cash-basis accounting system can accelerate expenses or defer income, while non-business owners may consider charitable donations, retirement contributions, or timing certain expenses for tax benefit.
Deductions and Depreciation: Business owners can review depreciation options, and anyone with significant medical or educational expenses should review potential tax deductions and credits.
Reviewing your key performance indicators (KPIs) is essential in measuring financial progress, whether these are business KPIs or personal finance goals. We’ll assess goals like savings rates, debt reduction, income growth, or other personal finance metrics, while business owners might track sales, customer retention, or profitability.
Action Plan: Together, we can adjust goals for the new year and identify which KPIs to focus on to achieve your financial objectives.
Whether you have employees or are the sole provider for your household, year-end is an excellent time to ensure compensation and benefits are optimized. Business owners should assess employee compensation and benefits to attract and retain talent, while non-business owners should review health, life, and disability insurance for the household.
Action Plan: Let’s review benefits to ensure you’re making the most of the options available for your family or business team. We’ll also review your retirement contributions and health or education savings accounts.
Reviewing investment performance and rebalancing portfolios at year-end ensures that your portfolio aligns with your goals and risk tolerance. Business owners may also consider how their business cash flow affects their personal investment strategy. You may also consider investments your business may need to make to set-up your next stage of growth.
Action Plan: Let’s take a look at your investments and rebalance where necessary, ensuring your portfolio stays in line with your long-term financial goals.
For business owners, an exit or succession plan is essential, even if you’re not planning to sell anytime soon. For non-business owners, an estate plan ensures that your assets are distributed according to your wishes. We’ll review business valuation, estate documents, and any necessary policies for business or family continuity.
Action Plan: Let’s update or review your succession plan, estate planning documents, and any other legacy considerations.
Creating a realistic budget, whether for your business or personal expenses, is crucial for guiding spending, saving, and investing decisions. Business owners should align budgets with growth goals, while non-business owners should focus on saving and investment goals, ensuring cash flow is accounted for.
Action Plan: We can work together to create a budget and forecast that supports your financial aspirations in the coming year.
Streamlining processes—whether business workflows or household budgeting and organization—can increase your financial efficiency. For business owners, this might mean updating software or simplifying client workflows. For individuals, this could involve automating savings or setting reminders for financial tasks.
Action Plan: Let’s identify areas where automation or streamlined processes can save you time and grow your money.
These year-end steps are about more than closing the books; they’re about setting you up for a successful future. By focusing on these financial priorities now, you’ll enter the new year with confidence, knowing you’ve optimized your finances and set clear, achievable goals for the year ahead.
Ready to take the next step? Schedule a meeting with me, and let’s make the most of your year-end planning!
Disclosures
Life Moves Wealth Management is a registered investment advisor offering advisory services in the States of Arizona and Indiana, and in other jurisdictions where exempted. Registration does not imply a certain level of skill or training. Information contained on this site should not be considered a solicitation to buy, an offer to sell, or a recommendation of any security in any jurisdiction where such offer, solicitation, or recommendation would be unlawful or unauthorized.
The information on this site is not intended as tax, accounting or legal advice, as an offer or solicitation of an offer to buy or sell, or as an endorsement of any company, security, fund, or other securities or non-securities offering. This information should not be relied upon as the sole factor in an investment making decision. Past performance is no indication of future results. Investment in securities involves significant risk and has the potential for partial or complete loss of funds invested. It should not be assumed that any recommendations made will be profitable or equal any performance noted on this site.
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Author: Dale Shafer II, CFP®, CBEC®, APMA®
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