10 Things to Do Before 2025 Ends

Introduction – 10 Things to Do Before 2025 Ends (0:00)

Bo: You might think you’ve got your money in order, but is there something you’re forgetting? Brian, I am so excited about this because we know that things can get crazy. Life can get in the way, and sometimes the little financial things, they just fall through the cracks. That’s why today we’re going to go over 10 things you need to do with your money before 2025 ends to set yourself up for a stellar year ahead.

Brian: Yeah, a lot of people think that you have to wait until the new year to begin making changes, but we know there are a number of changes you can make before you get to the new year. And sometimes those small little adjustments can have huge impacts into what your financial life looks like. Let me make it more exciting in the fact that not only this could have big results. I mean, think about lowering your taxes that you’ll pay because we’re going to be filing taxes before you know it in April. This could lower your tax bill. And how about the fact that you get to accelerate how much you’re actually saving for retirement.

Using the Financial Order of Operations (1:10)

Bo: So, a lot of people are going to be out there thinking, “Okay, guys, how do I start? Where do I think this?” We actually have a mechanism that you can use as a tool to do that. And it is the financial order of operations. What this shows is the nine steps of what you should do with your next dollar. But when it comes to year-end planning, it’s a nice recalibration to think through. Okay, have I done all the things that I need to be doing at each step along the way?

#1 – Count Your Cash (1:37)

Brian: So, let’s get right into this. Number one, cash is so important that it’s not just one step of the financial order of operations. It’s actually steps one and four. We want you to count your cash. And one of the things we want you to answer is, do you have your highest deductible covered? Have you laid out, okay, here’s my health insurance deductible? Here’s my auto insurance deductible. Here’s my home deductible. Whichever one is the highest, do I have that covered?

Bo: Cash is also going to be the thing you’re going to use for those big upcoming expenses. What if you’re replacing a car? What if you have, you know, a heat and air system or some other thing that you need to plan for? Cash is going to be the thing that keeps you from making those desperate decisions. And then the other thing we want you to do is answer the question, where is my cash? If it’s just sitting in your checking account or sitting in some low yield savings account, you are missing out on opportunity.

#2 – Get Your Free Money (3:02)

Brian: Cash is exciting, but it doesn’t have the sizzle of get that free money. And that leads to guys, get to step two. If you’re not taking advantage of the free money that your employer has set aside for you, you are missing out. And unfortunately there are a lot of people out there that fall into this category. Don’t be part of the 25% the one in 4 people that are not getting their full match or maybe not getting any match according to Vanguard.

Bo: So the first question you have to ask before the end of the year is am I contributing enough to get my full match? Did my employer say okay if you put in 6% we’ll put in 3%. If you put in 4% we’ll put in 4%. And if you put in 10%, we’ll put in… You get the idea. Make sure you understand the formula and you’re doing at least enough to get all of that free money.

Brian: And also, people often say, “Hey, that 25% savings goal that you guys post, that’s that’s a lot. How do you get there?” I’ll tell you one of the big ways if your income is less than $200,000. You get to count that free money from your employer.

Employee Stock Purchase Plans (4:09)

Bo: Another thing that we talk about that often gets overlooked here is people don’t realize that if you have access to an employee stock purchase plan at your employer that also counts as free money if your employer offers you an incentive like okay we’re going to let you buy this stock but we’re going to let you buy it at a 15% discount or we’re going to have an offering period where we’re going to look at the beginning price we’re going to look at the ending price and we’re going to pick the lowest price in this date range. All of those are different ways of getting free money.

Pre-Tax vs Roth Contributions (5:07)

Bo: So when you’re thinking about contributing to a 401k, when you’re thinking about getting that free money, obviously one question you have to answer is, okay, how much am I going to put in? And the answer is at least enough to get that free money. But the second question that you do need to answer is how am I going to make my contributions? Am I going to be doing pre-tax 401k contributions or am I going to be doing Roth contributions?

Brian: Well, that’s where it depends on how much income taxes you pay. And we talk often about marginal tax rates. That means what you’re paying on your next dollar earned. By the way, this is a combined rate because you have to take into account the federal marginal rate, but then also your state might charge income taxes with its own marginal rate.

Bo: Yeah. If you add up those two rates and you are under 25% then there’s a really good chance you ought to consider contributing to Roth because you’re in a low tax bracket tax-free growth is going to be super valuable for you. But if you add up those two marginal rates and it’s above 30%, you may want to consider pre-tax contributions because the current year tax benefit is so valuable.

Brian: And a lot of you are probably, wait a minute, I just Okay, that makes sense. I finally today was the day that I understand now what a marginal tax rate is. Now, I just need to know what the numbers are. That’s okay. We got you covered. But I want you to go to moneyguy.com/resources and we have our 2025 tax guide.

#3 – Complete Your Net Worth Statement (7:12)

Bo: All right, Brian. So, we’re using the financial order of operations to uncover some planning that we ought to be thinking through before the end of the year. And one of the things that we get so excited about this time of year is that it comes up to one of our favorite days. And one of our favorite days every single year is net worth day. And one of the beautiful things that your net worth statement does if you’re tracking it every single year is allows you to see, okay, what falls on my balance sheet? What are all the things that I own? And I lay that beside. What are all the things that I owe?

Brian: Yeah, I hope people will take advantage. We have two. We have a free version. If you just go to moneyguy.com/resources, we have a free net worth template for you. But if you’re somebody who really wants to accelerate your journey and kind of have that dashboard view to see what the changes are, because a lot of times when you’re in the beginning stages, you don’t even know what you should be looking at. We try to give you a shortcut on that by creating our own dashboard for you with our net worth tool.

Getting Rid of High-Interest Debt (8:45)

Bo: Now, Brian, you talk all the time about like if you’re an investor, a really good rate of return is somewhere, man, if you can get like 8 to 10% annualized on your return. That’s amazing. And yet, we know that there are debt providers out there, credit card companies out there that are charging 15, 20, 25% interest rates. If you have those kinds of debt on your balance sheet, it is going to be so hard for you to begin building wealth.

Brian: So we’ll start with the easy one. Credit card use is okay, but credit card debt, no way. Because when Bo was talking about those banks and lenders that are probably charging you 20 25% or greater, he’s talking about your credit cards. That is no go land, guys. That is highinterest debt. I’ll even I’m going to say something that’s my hot take. I even think 0% credit cards and that whole transfer game is a fool’s errand that’s not worth the hassle factor.

Auto Loans and Student Loans (9:46)

Bo: All credit card debt is high interest. But that must mean there are other kind of debts that might not always be high interest. And there are in fact and it’s types of debt that a lot of people have whether it be auto loans or whether it be student loans. If we just think about auto loans, we think that if you are in your 20s and you have an auto loan greater than 10%, we would consider that to be high interest. In your 30s, we consider auto loan to be high interest if it’s above 9%. And in your 40s, we consider auto loans to be high interest if it’s above 8%.

Brian: Let me go ahead and put some troll repellent out there. Everybody needs to understand cash is preferred for all car purchases, but we have a no hypocrite policy. When I was young, right out of college with that accounting degree, so excited to just get rip roaring and start building wealth, I realized very quickly I needed to have reliable transportation to get to that J O so I could actually start building wealth and I did needed to go finance that car. So, we’ve tried to give you these rules so that just in case you’re at that starting block and you also are going to need to go buy a reasonable car. That’s where 20% down, no longer than three years and not greater than 8% of your income. The 20/3/8 rule comes into play.

Bo: So, that covers auto loans. What about student loans? Well, we have the same type of rule for student loans, but the numbers change a touch. If you’re someone who’s in your 20s and your student loans are above 6%, you may want to begin prioritizing paying those off. When you get to your 30s, if your student loans are above 5%, you may want to prioritize paying them off. And then, if you’re in your 40s and your student loan interest rate is above 4%, you may want to begin paying it off.

#4 – Maximize Tax-Free Money (12:10)

Brian: So now as we’re thinking through, we’re working through the financial order of operations to uncover things to do before the end of the year. Number four, we want you to maximize that taxfree money. That’s right. You heard it right. The money that you will not have to pay income tax on.

Brian: We get really serious about this because think about it, guys. Our government, they like taxing us. And it’s very few things that they create legal loopholes where on purpose they’ve designed it as part of the process is we’re going to give these benefits of tax-free growth. You have to ask yourself why would they do that? The reason that is because it’s good for the public. They want you to have health care covered. They want you to have retirement coverage.

Health Savings Accounts (13:17)

Bo: So, let’s talk about the first account where this is available. It’s a health savings account. So, one of the questions that we want you asking is, okay, was I eligible? Was I in a high deductible plan last year that makes me eligible to contribute to a health savings account? If the answer to that is yes, did I max it out for 2025? The max limits are $4,300 for single contributors and then $8,550 for family contributors.

Bo: But now as we move into 2026, as we think about next year, open enrollment is likely coming up. So we want you answering the question, okay, which insurance plan makes the most sense for me? Should I go with the high deductible plan that’s available or might there be another plan, a subsidized plan, a Cadillac plan that makes more sense?

Brian: Look guys, this is one of those. Don’t skip doing your homework. I know that there’s this tendency once you graduate high school, college, whatever your higher education is. Homework is like, I’m done with that. No, there’s still going to be a lot of math you have to do in life. And this is one of them because as you’re growing your family, that’s going to be a different year than the years that you’re right out of college.

Bo: And remember, funding the HSA is just the first part of the equation. And we want you to be not like the 85% of folks who just use it as a slush fund. We want you to be like the 15% of folks that actually put that money to work.

Roth IRAs (15:57)

Bo: So that’s the first account, health savings accounts. There’s another type of tax-free account that we absolutely love and that account is a Roth IRA.

Brian: Yeah. Remember how I was talking about how the government has restricted how much you can put in. These Roth IRAs are so valuable. This is going to be your gateway into taxfree millionaire. Can you imagine? I just you want to get me excited thinking about having a double comma 7 figure portfolio that the government’s not going to tax and I’m even going to potentially be able to pass it on to my heirs. Guys, this is the good stuff here. So good that the government restricts it. $7,000 annual contribution. Yes, if you get to be 50 and over, you can do an extra $1,000. There’s phase outs. Once your income, you make too much money. $236,000 for married filing jointly, $150,000 for single individuals.

Bo: Now, maybe you’re someone who you said, “Guys, I got to know I love Roth IRAs. I’ve been doing a Roth IRA, but man, I didn’t know this this year was going to be quite as good as it was.” Or maybe my spouse went back to work this year. Maybe I got a bonus that I wasn’t expecting and all of the sudden I recognize that I’m going to make too much money this year. I was ineligible. That’s okay. These things happen. But what you want to do is before you file your taxes before you get to the next year. If you can fix it now, you’re going to make your life a whole lot easier.

#5 – Max Out Employer Retirement Plans (18:01)

Bo: Okay. So once we’ve maximized the taxfree accounts, we’ve put the money in the HSAs, we put the money in the Roth IRAs, now we get to go back to our employer sponsored account, now we get to go back and hit that maximum salary deferral limit either in our 401k or our 403b or our 457 or our simple IRA.

Brian: I think it’s important. Let’s go ahead and throw the numbers out there so people know what they’re dealing with. If we’re, you know, if you’re in a 401k, 403b, all those the alphabet soup that Bo threw out there with the numbers. $23,500. That is your 2025 number. If you’re 50 and greater, it jumps up over to $31,000 because there is a catch-up. And there’s a unique thing that just kicked in. There’s a it’s called a super catchup for those that are 60 to 63.

Bo: And we want you to recognize that our tax code is it’s a little nuance and there are things that can have big impacts even if you’re just over by $1. So, one of the things we want you to think through is, okay, if I can, if it’s in my power to be able to max out these salary deferrals before the end of the year, will this open up some other tax opportunity for me?

#6 – Finish the Drill (21:31)

Brian: Well, and that’s what that leads to. We’re going to say this is number six, but this is really the introduction to step seven, the hyperaccumulation phase of the financial order of operations. We called it finish the drill. I love this step and it’s often misunderstood is because this is the step where we really, if you think about steps one through six is to keep your life out of the financial ditch by making desperate decisions or it’s tax incentivized because of what’s going on in the tax code. It is step seven that allows us to say, “Hey, how are we actually going to use this money? How is my personal finances structured?”

Understanding Your 25% Savings Rate (22:36)

Bo: So, you’re hearing over and over the goal is to be saving 25%, getting to 25% hitting that number. And so, a lot of folks ask, okay guys, what counts in this? Well, when we think about the 25% savings rate, we’re thinking about saving for future financial independence. So, we’re thinking about contributions that are going towards employer sponsored plans. That’s 401ks, 457s, 403bs. We’re thinking about IRAs. We’re thinking about HSAs if you’re one of the 15% that’s actually investing them.

Bo: Here’s what it does not count. It does not count prepaying your mortgage. It does not count the principal payments on your mortgage. It does not count the investment in the real estate or rental property. Those are not part of your 25%. We want 25% going towards your liquid portfolio for your financially independent future.

Taxable Brokerage Accounts (23:48)

Brian: Yeah. And the last one on that list is that taxable brokerage account. And it’s a banger because what I love about this is that for a lot of you as you’re starting to plan and figure out how you use this money, it has the maximum amount of flexibility. It still can be used for retirement, but here’s what’s so cool about the after tax accounts is that it doesn’t have limits on contributions. Put as much in there as you want. You load it up. It’s also still tax advantage. You think about capital gains rates, dividend tax rates.

Bo: In 2025, if your adjusted gross income is below $48,350 for single individuals, that’s 0% cap gains rate. And if you’re married filing jointly and your income is below $96,700, you’re in the 0% capital gains rate. Means you can go buy that stock, buy that index, buy that investment, have it grow, and when you go to sell it, so long as you don’t go over these income thresholds, you pay no income tax on it at all.

#7 – Fund Abundance Goals (25:42)

Bo: Yeah, this is the one, man. It’s nice cuz a lot of people I think they get this out of order. They’re funding the kids before they even fund their own retirement. And I’m all about funding some kids education because there’s even some tax benefits for it in a lot of states. So, we actually think this is the perfect time for you to consider, hey, once you get to step eight of the financial order of operations, prepaid future expenses, let’s go ahead and take care of those kiddos, too.

Bo: And it might not just be college. I mean, that’s a great example, but a lot of people don’t recognize, yeah, you can save for college. You can use 529s and their state tax incentives to do that. But maybe you just want to get your kid excited about building their financial independent future. So, you want to help them open a custodial Roth IRA and maybe do that parent match.

Brian: Well, also look, we kind of buried the lead. We said prepaid future expenses because it does it makes you think of college and so forth. But I always I have a a nickname for step eight and it’s abundance goals because this is when you get to actually potentially consider doing things of increasing your lifestyle.

#8 – Prepay Low-Interest Debt (30:10)

Bo: And maybe you’re someone who says, “Okay, I’ve done the things and I’ve gone to the vacations and I have all the stuff, but now I just want to start shoring up my financial life and going into this end of this year. Maybe I want to make 2025 the year. Maybe this is the year where I want to go ahead and knock out that mortgage and I want to prepay that lowinterest debt and I want to pay off the house and get that off my balance sheet.

Brian: Let’s put some guardrails on this before we celebrate because I know where it’s what’s coming. I can see the tea leaves. Is that I think that this is something that I’m I would encourage my financial mutants. Look, I’m going to let you once you get beyond saving and investing 25% if you want to go pay off the low interest mortgage. It’s okay. It’s not optimized, but it’s a okay because that’s a choice that you can make at step eight. But really step nine, the heart of this thing is that you were thinking about this in terms of, you know, am I 45 and over?

#9 – Remember Generosity (31:59)

Bo: Now, remember, we’re talking about 10 things to do before the end of the year. And number nine, this is not one that you save for the end of the year, but this is one that’s worth revisiting. We want you to remember generosity. Remember, this is a great time to begin thinking, are there causes that I have not funded? Are there causes that I want to support that I want to donate my money to? And are there efficient ways that I could be doing that?

Brian: Well, I I thought I felt a little convicted this morning. I was as I was getting ready for the show today. It hit me. I I think I wear like six shirts for on our show. I need to add more. But then when I look at my closet and I see I have six shirts that I’ve like deemed camera ready and then I have probably 35 shirts that are just not camera ready quilt of life that I’ve acquired over the last 30 years. I need to clean my closet up. Get in there and start figuring out is there something you can donate.

#10 – Consider Professional Guidance (33:31)

Bo: I love it. And so the number 10 as we’re thinking through things to think through before the end of the year, it’s worth doing an assessment and okay, have I reached a stage of life where I figured I figured out that the gravity of the financial decisions I’m making is so great that I’m uncomfortable making them by myself? Or maybe life has just gotten complicated. Or perhaps you’re just someone who’s gotten busy and all of a sudden the things that should not be falling on the back burner of your financial life are falling on the back burner.

Brian: I think a lot of you guys you you watch our content for years and go, “Man, I like how these guys think about money. I’ve never heard financial people talk about it in these common sense but also maximization type strategies. It doesn’t have to end with just the content because as we as Bo just shared personal finance is very personal and if you do this right what is simple in the beginning become harder and harder and more complicated because it’s just success creates that complication. We’d love to be your co-pilot as you are the CEO the CFO of a multiple seven-figure enterprise.

Brian: I’m your host, Brian. Mr. Bo, Money Guy Team out.