Year End Financial Checklist, 2010

It’s a good practice to keep up on your credit, especially because as many as 25 percent of credit reports contain serious mistakes. You can get a free report from the three credit reporting companies at the official site of AnnualCreditReport.com every 12 months (if you’ve never done this before, read this info from the FTC)

If you’re 70.5 years, you’re required to withdraw a minimum amount from your retirement account (IRA, 401(k), etc.). There are heavy penalties for not taking the required minimum distribution. The rules are specific to the account, and they change from year to year, so talk to your financial advisor. There’s some useful info in this Investopedia article.

A lot of insurance offers annual wellness checkups. It’s a reasonable idea to take advantage of these yearly benefits before they expire. There is still time to get an appointment. (With high deductible insurance plans it depends. If you’ve already maxed the deductible, then the appointment now will be covered. If not, then you may wish to group all medical work early next year to have a higher chance of maxing out the deductible and getting more medical expenses covered.)

This is an obvious one but worth mentioning. A lot of companies have paid time off that expires every year. With vacation time, often only a certain number of hours can roll over to the next year. It’s a good idea to check your hours so you don’t lose them. If you’re unable to take the time off due to a busy project, you might be able to get paid for those hours–but this depends so check with your company’s human resources.

If there ever was a good time to update your resume, it is probably at the year end when most companies are doing year-end reviews. You’ve probably already prepared some sort of self-review and you’ll get to hear what your bosses and peers liked about your contributions to the company. Write these down now! An added plus is you’ll be prepared if you wish to search for jobs.

You cannot carry money from an FSA into the next year, so it is vital to spend it on qualifying health expenses like copays, over the counter medicine, or costs of annual checkups.

You still have a few weeks to contribute to your company retirement plan. You can also take this time to contribute to an IRA (though technically you have until you file your taxes or April 15, 2011 to make contributions for 2010). You may wish to check the max contributions for retirement plans.

It is great setting up a financial system to know where your money is going. I use a simple budget and expense tracking spreadsheet which I’ve made available for free in the spreadsheet section. You can also consider an automated tracking system that aggregates bank and credit card data. The visualizations and convenience is great. I like bundle.com, and there are also tools at mint.com and pncvirtualwallet.com

Have you checked your beneficiaries lately for bank accounts, investments, and insurance? This is something I like to look at once a year to be sure money will pass on to the right people. There are various ways you can designate a beneficiary so check out this article too.

There are definite tax reasons to donate to charity before the year ends. The exact rules depend on whether you’re giving cash, property, or investments – some insight on the rules are here.

You can gift up to $13,000 to each person you wish in 2010 free of the federal gift tax, or you can put the same amount in a 529 plan to help save for a child’s college. The deadline is the year end. See more info on the gift tax and the 529 plan.

This last item encompasses a few things: cable, phone, internet, magazines, and cell phones.

While subscriptions are nice in that they auto-renew, that also makes them items easy to forget about and end up paying too much. Once a year I like to set some time to check on my cable, phone, magazine, and cell phone options. I might find that the best option is to keep everything the same, but I feel a lot better having searched the market. If you see a better offer, at a very minimum you can ask your own company to match.