As we cruise into the final stretch of the year, many of us are reflecting on our goals—both personal and professional—and making plans for what’s next. But before you start dreaming about 2025, there’s one area that shouldn’t be overlooked: your finances.
Sis, we know handling money can be daunting, but a little planning now can set you up for a strong start to 2025. Whether it’s setting aside a little extra for an upcoming trip or just making sure we’re getting every bit of value out of our hard-earned money, October is the perfect time to hit reset, take stock, and strategize before the ball drops on New Year’s Eve.
For Black women, who are often navigating unique financial challenges, being intentional about year-end planning is crucial. According to the Federal Reserve, the median net worth for Black households remains significantly lower than for White households—an unfortunate reality that underscores the urgency of being proactive with our financial planning. With that in mind, building a solid financial strategy isn’t just about numbers—it’s about empowerment and creating a legacy for the next generation.
So, what should your focus be as we approach year-end? Here are some actionable steps and key considerations to help you finish 2024 strong.
Review your budget and set new goals.
Take a moment to revisit your budget and spending habits from the past year. Have you been sticking to your savings plan, or did lifestyle creep take over? This is the time to assess where your money is going and make adjustments to set yourself up for 2025. According to a 2024 financial survey, nearly 70% of Americans report that they don’t follow a budget, which makes it easy to lose sight of long-term goals. Updating your budget isn’t just about cutting costs—it’s about aligning your spending with your priorities and making sure your money is working toward your dreams.
Maximize your retirement contributions.
If you’re not already maxing out your 401(k) or IRA contributions, now is the time to catch up. For 2024, the maximum 401(k) contribution is $22,500, and if you’re over 50, you can take advantage of an additional $7,500 in “catch-up” contributions. These accounts offer valuable tax benefits and can be a game-changer when it comes to long-term wealth building. Even a small increase in your monthly contributions now can translate into thousands more for your future self.
Prep for tax season early.
Year-end is also the perfect opportunity to get your tax planning in order. Review your financial documents and consider strategies like tax-loss harvesting, which allows you to offset gains with losses in your investment portfolio. This tactic can reduce your taxable income and help you come out ahead when it’s time to file. If you have a Health Savings Account (HSA), now’s the time to top off contributions, as they also offer triple tax advantages: contributions go in tax-free, grow tax-free, and can be withdrawn tax-free for qualified medical expenses.
Revisit your insurance coverage and estate planning.
Life can change a lot in a year, so make sure your insurance policies and estate plans reflect your current reality. Whether you’ve welcomed a new family member, bought a new property, or experienced other significant life changes, updating your beneficiary designations and coverage amounts is essential to ensure your loved ones are protected.
Strategize your debt payoff plan.
Interest rates have been on the rise, which means carrying high-interest debt like credit card balances can get costly fast. Make a plan to aggressively pay down high-interest debt before taking on new financial goals. Consider focusing on your highest interest loans first, or try the snowball method—paying off the smallest debt to build momentum before tackling bigger amounts.
Plan for charitable giving and gifting.
If you’re planning to make charitable contributions, now is the time to do it to maximize your tax benefits. Giving appreciated assets like stock can help you avoid capital gains tax, allowing you to donate the full value of the asset. If gifting to family members, take advantage of the annual gift tax exclusion, which allows you to give up to $18,000 per person in 2024 without triggering any tax obligations.
Build up your emergency fund.
According to a 2024 survey, over 56% of Americans would be unable to cover an unexpected $1,000 expense. For Black women, who are often more financially vulnerable, building a solid emergency fund can be crucial for staying afloat during tough times. Aim to have at least three to six months’ worth of expenses saved in a liquid account that’s easy to access when you need it.
Make a plan for 2025.
Finally, set yourself up for success in the new year by defining clear financial goals. Whether you’re planning to buy a home, start a business, or simply build more savings, having a detailed roadmap will keep you focused and motivated. And remember, your financial journey is unique to you, so don’t hesitate to reach out to a financial advisor to help tailor a plan that works best for your circumstances.
By being intentional and proactive with these October money moves, you can enter 2025 with a renewed sense of financial empowerment. Take this time to reflect, reset, and realign your finances so you’re well-prepared to make the most of the new year.