9 Things You Must Do Before 2026 (Financially)

The end of this year is quickly approaching, and I think now is the perfect time to set yourself up for success heading into the new year. So in today's video, I have a list of nine financial moves you can make today before the year ends to take control of your finances and really start the new year off strong. All right, starting with number one, taking stock of your cash. So at the end of the year, it's a good time to count how much money in liquid assets you have. This can be anything in your checking accounts, money market funds, cash under your mattress, or cash in a high yield savings account. The idea is that you want to know how much liquid cash you have in case you run into an emergency or an unexpected expense. And when I think of something that is liquid in nature, I am thinking that these assets can be turned into cash within one to three business days. Then you want to figure out what proportion of your entire portfolio is in cash, because sometimes you might have too much, sometimes you might have too little. So in a previous video, I said that the right amount of cash to have in your accounts is the combination of your emergency fund plus any short-term savings goals that you might have. So for example, if your emergency fund is around the equivalent of $25,000 for six months, and you're also saving towards a house down payment, and you have $20,000 in there, then the right amount for you might be 25K plus 20K, so $45,000. I think one of the most practical things that you can do today is to calculate exactly how much of an emergency fund that you actually need, and then create some separate bank accounts for that fund, as well as any short-term savings goals that you might have. By the time that your year ends, you should know exactly what your liquid assets look like heading into the new year, so make sure you have that dialed in. The second thing you want to do financially before this year ends is to make sure you have taken advantage of any free money that your employer offers you. Many of you watching the channel know that you should probably take advantage of a 401k match, but this is one of those things that actually must be done before the calendar year ends. You don't have to max out your 401k just yet. In fact, many people don't even have enough money to max out their 401k, and some people just might not prefer to. However, I think you would be kicking yourself a little bit if you at least didn't take advantage of the free money of an employer match. Oftentimes, employer matches are dollar for dollar, so this is known as a full match, and the employer will match 100% of your contributions up to a certain limit. If you make, let's say, $100,000 per year, they might match, let's say, 100% of up to 4% of your salary, so that means $4,000 of your contributions, they can match dollar for dollar. You would think that this is a pretty no-brainer thing to do, but there is an article that I found that said at least one-third of people don't even do this, or they don't even take advantage of the full match. Now, let's say your employer doesn't offer any matches. Another place where you can hypothetically get some free money is an employee stock purchase plan, or that's known as an ESPP. This is where if you have a company that you work for that owns publicly traded stock, sometimes they'll offer to sell you some of that stock at a discount. For example, I have a friend that works at Adobe, and she gets a 15% discount on buying her stock through Adobe when it's done through her ESPP plan. There will be some restrictions with these types of plans. Typically, you have to hit a holding period requirement, and I've even heard of a tax treatment difference where if you sell the stock within a certain timeframe, the discount that you get gets taxed as ordinary income rather than capital gains, further disincentivizing you from just flipping the stock. However, if you are at a company where you strongly believe in the thesis and the future of that company, and you're able to get a 15% or maybe even more of a discount on buying the stock, that is a version of free money that you can opt for. And hopefully you can do that by the end of this year. The third thing you should do before the year ends is to count how much in liabilities you have. That means if you owe some money on a car, perhaps you owe money on a credit card, maybe you have some personal loans. You just want to know what your total liability number is, because knowing how much you owe is just as important as knowing how much you actually have in assets. Once you have all of your liabilities written down, you want to sort them by interest rates. And I would say, if you do have any high interest rate debt, this is where I would personally start looking at how I could pay those off first, especially as we move on to the new year. After you've done that, then you want to figure out how much in assets you have. So this is where you can add up every single bank account that you might have, then add up all of your investments within your brokerage accounts, Roth IRA, 401k, et cetera. Then also add in any assets you might own, such as a car, a house, and maybe you have part of a business equity stake. You can add that in as well. I hope that you can see where we are going here, but once you have a list of your assets, and then a list of your liabilities, you can simply take your assets minus your liabilities and guess what you have? You actually have just calculated your net worth. So I've been tracking my net worth every single month since 2016. And I can tell you that a monthly tally of your net worth is a little bit counterproductive, I think, just because my net worth can fluctuate a lot based on what the investment values are. Earlier on in my life, I really wanted to track my net every single month, just because I liked to know what that number was and see if it grew. But as investments have become more and more of a percentage of my overall net worth, I find that my net worth can fluctuate wildly on any given month. That is pretty mentally taxing. So what I'm doing starting in 2026 is to check my net worth once every quarter, or maybe even just once a year. Whatever interval you choose, as long as you're tracking your net worth, I think you're ahead of the game. Just choose an interval that actually works for your mental health. Also, I was looking at some of my comments and saw some really fun ones about people who have increased their net worth by watching this channel. So if you feel comfortable, leave me a comment below with your net worth and how long you've been watching the channel. I think it'd be really fun to hear from you all. And I think it would be also really fun to see everyone else root each other on in the comments. The fourth thing I want you to take note of, as this year ends, are your big three expenses. That would be housing, transportation, and food. And these are the three expenses that typically make up 60% to 70% of most people's spending. If you're looking to budget and optimize how much you're investing and saving, usually you want to look at these three categories first. For example, if you're spending $3,000 a month on rent in a high cost of living city, but you could spend $2,000 or maybe $2,500 a month in a comparable apartment that's maybe a 20 minute commute away, you could save a lot of money quite instantly. There is a bit of a lifestyle trade-off there, but I think that oftentimes we get into an autopilot mode where we aren't really thinking about the three biggest expenses that we can optimize. Some people get really focused on the weeds and the little things of your life, like your daily coffee habit or perhaps your gym classes. As you go into this new year, I think reviewing the top three expenses that you are spending your money on, such as housing, transportation, and food, these will be the biggest categories that can actually make a difference. If you find that you're spending too much money on one of these categories, perhaps by the time it's December 31st, you can figure out how to make it a little bit cheaper for yourself to live. The goal isn't to be as cheap as possible, but if you can be a little bit more intentional with the three biggest expenses of your life, that should set you up for success in the new year. The fifth thing today is tax loss harvesting. This is a strategy where you would sell your investments that have gone down in value this year to lock in losses, and then you can use that to offset any capital gains that you had this year. People usually like to wait until two to three weeks before the end of the year to do this, but you can do it anytime before the end of the calendar year. Let's say in February, you bought Alaska Airlines stock at the high, and now you are sitting on a pretty significant loss of $5,000, but you're still holding the stock as of today. At the same time, you also own AMD stock, which you bought in March, and you flipped it in November of this year for a realized profit of $7,000. That means you are sitting on a $7,000 capital gain, and you would owe taxes on that $7,000 gain if you're not able to offset any of those gains. So tax loss harvesting is simply the idea that you can sell your Alaska Airlines stock to offset the gain that you have on the AMD stock. So in this hypothetical, you sell your Alaska Airlines stock, you will take the $5,000 loss there, and then you will offset the $7,000 gain that you have by $5,000. Thus, your net capital gain for the year is now $2,000 total. And this strategy is pretty interesting because then it kind of brings up this loophole of like, oh, well, couldn't I just sell Alaska Airlines stock, take the loss, and then just buy it back the same day? Well, unfortunately, you cannot because there is something called the wash sale rule. That rule does not allow you to repurchase the same security within 30 days of selling it, and it was created to prevent against this exact behavior of you offsetting your gains. The rule wants you to actually exit your position, not just exit it for tax purposes and buy it right back up. Now, I do want to clarify, you can actually physically buy the stock right back up after you, let's say, lost money on it, but you wouldn't be able to claim the loss on your tax return. Another great thing about tax loss harvesting is that if you ever have a huge loss on a stock, let's say you lose $100,000 this year on an energy stock, that $100,000 in losses can be used to offset gains over the current and future years until the full $100,000 loss is utilized. There is one caveat, which is if you want to deduct losses against your income, you can only take up to a maximum of $3,000 in losses against your income tax every year. Let's say you did lose this $100,000 on an energy stock, but you had $20,000 in gains from another stock like AMD. You could use the $20,000 in losses to offset those gains, so you would have no capital gains tax, but you can't then use the remaining $80,000 in losses that you have to reduce your income tax. You can take $3,000 in losses against your income tax, that's totally fine, and then you have the remaining losses that you can carry forward to future years. I hope that example kind of makes sense. All right, coming in at number six today, the sixth thing that you should do before the year ends is to simply review and renegotiate any bills that you might have. I will do this for cable bills pretty often, so I will call the provider at the end of the year, and I usually just say something along the lines of, hey, do I qualify for any discounts this year, or am I able to get promotional pricing again if I sign on for another year? Oftentimes, they will have some sort of discount or some sort of promotional rate that you can lock in as long as you perhaps sign a contract extension. Insurance is another one of these categories. You can call your health insurance provider, your home provider, or perhaps your auto insurance provider, and you can try to save some money just by talking to them or even just comparing insurance offers across different providers. Lastly, at the end of the year, you can also call your credit card company. Now, while they aren't a provider in the traditional sense, you can call them to negotiate a lower interest rate or perhaps inquire about any promotional offers they might have to help you save on interest and fees. If you can even just save, let's say, $100 a month by making a phone call, I think that is a pretty good deal in my book. Coming in at number seven today is to maximize any tax-free money opportunities you might have, like the Roth IRA or the HSA. For the HSA, which is the health savings account, this is an account set up to incentivize you to save for health-related expenses, but it's really one of the most tax-efficient savings vehicles because it offers triple tax benefits. Number one, contributions are tax-deductible, which means that will lower the total amount of income tax you pay in any given year as long as you contribute to it. Number two, the growth of the account is tax-free, just like the Roth IRA. And third, withdrawals for qualified medical expenses are also tax-free. The one thing you need to make sure of if you do have an HSA is that you are actually investing the funds within the HSA itself. Too many people will start an HSA, don't invest any of that money, so make sure you are putting that money to good use, invest in low-cost index funds, and that way you will take advantage of the HSA's tax efficiency. The contribution limits will be put on the screen right here, but it's typically around $4,300 for yourself or up to $8,750 for a family. When it comes to the Roth IRA, this is the individual retirement account where you can contribute funds to the account, invest the funds, and then any of the earnings in that account grow tax-free upon withdrawal. The limits for this certain account will be posted on the screen, but under the age of 50, it's around $7,000. Over the age of 50, there's a catch-up, so it's around $8,000 per year. The Roth IRA also has income limits, so if you are making too much money for the Roth IRA, so that means you're an individual making over $165,000 per year, or you are a couple making over $246,000 per year, you are technically not eligible for the Roth IRA. However, what you can do is just make a backdoor Roth IRA instead. I know that this sounds like some sort of crazy secret, but if you actually Google it, it's like the world's worst kept secret, like in finance. All you do is contribute to a traditional IRA first, and then you convert the traditional IRA into a Roth IRA within the brokerage account. It sounds really kind of sketchy and shady, but I've done it myself, and it literally just takes a few clicks. The only thing you want to be careful of is something called the pro rata rule if you are doing this, and that rule states that if you have both pre-tax and after-tax funds in a traditional IRA, you cannot convert only the after-tax contributions without actually converting the pre-tax contributions as well. So if you are someone who has existing pre-tax funds in your traditional IRA, there are some ways to kind of get around this, and I will leave some links down below with relevant information on that situation specifically. The number eight thing to do this year for 2026 is probably the easiest one, but it may be very tedious. Tell me your savings rate. This is one of the most fundamental questions you should know the answer to about your finances any given month. Like if I were to come to you on the street and be like, excuse me, what's your savings rate? You should know approximately what that is. An easy way to figure this out is to simply know how much you spent, let's say for the last three months on average, and know how much you are bringing in on a monthly basis. Take the difference of that. So how much you bring in versus how much you spend on an average monthly basis, that is your savings amount. And then you can get your savings percentage from that number. We here on the channel want to target a 15 to 20% savings rate if we can, and that percentage will include retirement contributions, pension contributions, any ESPPs that you might have, and even contributions to your brokerage account. So fun fact, I ran this poll on the community post tab on this channel just a week ago, and a large majority of you actually save over 25% of your income with retirement contributions. So that is incredible already. The ninth thing you should do before this year ends is to set up your target financial goals for 2026. I really want you to think about what your biggest goal is in 2026, and to singularly focus on that one goal or two goals that you might have. Some examples of financial goals might be setting up a 529 plan for your kids, setting up a custodial Roth IRA for your kids, starting your own Roth IRA, maxing out your 401k, buffing up that emergency fund, investing in index funds, checking in with a financial advisor, getting your credit card debt under control, paying off your mortgage, paying off your car, saving more, or even maybe spending more. The point is that you have been working hard on your finances for a long time, and if you're watching this video too, you're probably already financially minded. But you should also know that people that set way too many goals might not accomplish any of them at all. So I would much rather you focus on one or two financial goals for next year, and make sure that you can hit those goals and actually execute on them. If you can attach a number to a goal as well, I think that's really helpful. So let's say you are $14,000 in debt on a car loan, and you just really want to pay that off in 2026, I would work backwards from $14,000. You can think about how am I going to scrounge up an extra $14,000 over the course of the full year? Will it require me to earn some sort of side income? Will it require me to be a little bit more diligent with my budget? Think about actual ways to hit that goal that you really want to hit, and I think you will be better off financially forward. So below in the comments, I want to hear everything from you guys. I want to know what your goals are in the comments, your savings rates, your net worth goals, et cetera, as long as you are comfortable sharing. I hope that your Q4 is going well. If you'd like to watch my video on the 10 jaw-dropping money stats of the average person, I will leave that video up right here. I'll see you guys in a future video on the channel. Happy almost new year, or maybe happy new year if you're watching this in the future. All right.