Year-end financial planning can help you assess your family’s financial situation, identify areas for improvement, and set achievable goals for the future.

Here’s a closer look at seven essential areas where reviewing may enable you and your loved ones to better navigate the path to financial success.

Financial goals

As the year comes to an end, be sure to revisit your financial goals. Are you saving for a major purchase, retirement, or education or working to reduce your debt? Take stock of your progress toward these endeavors, and make note of any changes in your circumstances, such as a new job or additional educational expenses. This will help you better understand how you need to adjust your current spending and saving habits accordingly.

Budget

You should also examine your family budget to see how well you’ve adhered to it throughout the year. Look for specific areas where you need to cut back or reallocate funds to better align with your short- and long-term goals. If your family doesn’t currently follow a budget, create one for the upcoming year. It can allow you to make more informed decisions by making clear how much your family brings in and where that money goes each month.

Retirement contributions

For any of your retirement savings accounts, such as a 401(k) or IRA, consider maximizing your contributions before the deadline at the end of the year. These contributions may reduce your annual taxable income, which can help when Tax Day rolls around. And, ultimately, the more you invest in your retirement accounts, the more you’ll benefit from compounding interest over time.

Tax planning

The end of the year is an excellent time to begin planning for the coming tax season. Start by gathering all the necessary documents you can, including your previous year’s tax return and receipts for business expenses, charitable donations, and medical expenses. Have each household member check that their employer has their current address so their tax forms arrive in a timely manner. And if your family experienced any big changes this year, including the birth of a child or a divorce, you may need to update your filing status before completing your next tax return.

Insurance coverage

It’s important to review and update your health insurance policy before the end of the year to make sure you and your family have the coverage you need. It’s also a good idea to look at your other policies, including auto, home, and life, before the year ends. Discuss any recent life or household changes with your various insurance agents to better ensure you have the right coverage for your situation.

Estate planning

Especially if there’s been any major developments in your life this year, be sure to update your will, powers of attorney, and beneficiary designations to reflect your current situation. If you don’t have these documents in place, consider consulting with an estate attorney to get started. Estate planning may not necessarily feel essential, but it can help protect your loved ones during a time of uncertainty.

Emergency fund

If you haven’t already, create a plan for building an emergency fund. It’s recommended that you save enough to cover between three to six months of your total living expenses. While that might seem like a lot, building this fund can help protect your family should you experience any financial setbacks in the coming year. And if you had to use a portion of your emergency fund this year, develop a strategy for building it back up in the next few months.

When you take the time now to assess your family’s financial situation, you can set yourself up for a more secure and prosperous future.