As the new year begins, financial planning takes center stage. A series of specific tasks are recommended for each month to manage personal finances effectively.
In January, creating a spending budget for 2026 is advised. This involves listing fixed expenses like mortgage or rent, health insurance, and utilities. Discretionary spending can be guided by reviewing 2025 credit card summaries, which categorize expenses from healthcare to entertainment, helping identify areas to reduce.
Also in January, checking emergency funds is crucial. These accounts should cover unexpected events such as job loss or medical emergencies, ideally holding a year's worth of expenses, though starting with a few months' worth is acceptable. Additionally, reviewing credit reports from Experian, TransUnion, and Equifax via AnnualCreditReport.com is recommended to spot errors like misspelled names or incorrect Social Security numbers, which can be disputed with proof.
For self-employed individuals, paying quarterly estimated taxes by January 15, 2026, is necessary to avoid penalties, covering income from September 1 to December 31, 2025. This requires paying at least 90% of the current year's tax or 100% of the previous year's tax, whichever is smaller, using Form 1040-ES.
In February, discussing money with a spouse or partner is suggested, with Valentine's Day noted as a fitting time for such conversations.
March involves reviewing Flexible Spending Accounts (FSAs), as many plans allow until March 15 to use remaining funds from the previous year for eligible medical expenses like deductibles, co-payments, dental costs, or hearing aids.
April requires paying personal federal income taxes by April 15, when the first estimated tax payment for 2026 is also due. Funding retirement accounts for 2025 is possible until this date, with contribution limits of $23,500 for plans like 401(k)s and $7,000 for IRAs, plus additional amounts for those aged 50 or older. Required minimum distributions (RMDs) from IRAs and workplace plans must be taken by April 1, 2026, for those who turned 73 in 2025, with penalties for non-compliance.
May is a time to review tax withholding using Form W-4, adjusting amounts based on the previous year's tax bill.
June calls for a mid-year financial checkup, assessing asset allocation in stocks, bonds, and cash to align with goals and risk tolerance. A common guideline suggests subtracting age from 110 to determine stock percentage.
In July, checking beneficiaries on retirement plans and life insurance policies is advised, especially after events like divorce or family deaths.
August and September are suitable for opening 529 education savings plans as school starts.
October involves checking the Social Security Administration's cost-of-living adjustment (COLA) announcement for 2027, typically made in the third week based on CPI-W data, affecting payments starting January 1.
November focuses on charitable giving, with up to $19,000 per person giftable without tax returns, and deductions available for contributions exceeding $32,200 for married couples filing jointly.
December tasks include making Qualified Charitable Distributions (QCDs) from IRAs to charities by year-end for those aged 70½ or older, with a limit of $111,000 per individual. Deducting unreimbursed medical expenses exceeding 7.5% of adjusted gross income is also possible, and maxing out Health Savings Accounts (HSAs) is recommended, with contribution limits of $4,400 for individual coverage or $8,750 for family coverage, plus an extra $1,000 for those aged 55 or older. Self-employed individuals should consider setting up solo 401(k) plans by December 31 to make contributions for 2026.