Read Time: 4-minutes
Happy Saturday,
Here is this week’s edition of 6-Point Saturday — financial insights to help you make smarter money decisions.
Table of Contents*
*Clickable in the online version.
Point #1 — A Powerful, Simple Mechanism
“In 2004, nine hospitals in Michigan began implementing a new procedure in their intensive care units (I.C.U.). Almost overnight, healthcare professionals were stunned with its success.
Three months after it began, the procedure had cut the infection rate of I.C.U. patients by sixty-six percent. Within 18 months, this one method had saved 75 million dollars in healthcare expenses. Best of all, this single intervention saved the lives of more than 1,500 people in just a year and a half. The strategy was immediately published in a blockbuster paper for the New England Journal of Medicine.
This medical miracle was also simpler that you could ever imagine. It was a checklist.
The checklist strategy implemented at Michigan hospitals was named the Keystone ICU Project. It was led by a physician named Peter Pronovost and later popularized by writer Atul Gawande.
In Gawande's best-selling book, The Checklist Manifesto, he describes how Pronovost's simple checklist could drive such dramatic results. In the following quote, Gawande explains one of the checklists that was used to reduce the risk of infection when installing a central line in a patient (a relatively common procedure).
‘On a sheet of plain paper, [Pronovost] plotted out the steps to take in order to avoid infections when putting a line in. Doctors are supposed to (1) wash their hands with soap, (2) clean the patient’s skin with chlorhexidine antiseptic, (3) put sterile drapes over the entire patient, (4) wear a sterile mask, hat, gown, and gloves, and (5) put a sterile dressing over the catheter site once the line is in. Check, check, check, check, check.
These steps are no-brainers; they have been known and taught for years. So it seemed silly to make a checklist just for them. Still, Pronovost asked the nurses in his I.C.U. to observe the doctors for a month as they put lines into patients, and record how often they completed each step. In more than a third of patients, they skipped at least one.’
This five-step checklist was the simple solution that Michigan hospitals used to save 1,500 lives. Think about that for a moment. There were no technical innovations. There were no pharmaceutical discoveries or cutting-edge procedures. The physicians just stopped skipping steps. They implemented the answers they already had on a more consistent basis.”
It’s pretty mind-blowing that such a simple mechanism can have such a profound impact.
But humans aren’t perfect. Even doctors.
Checklists add discipline to processes and systems when it matters most.
And with the end of the year barreling down on us, many important tax & investing deadlines can make or break your finances…
So, let’s take a look at the most important moves you can make before 2025 comes to a close.
Point #2 — 4-Point End-of-Year Checklist
Many year-end financial checklists go overboard. Between work, holiday parties, shopping, and all of your other time constraints, I know your time is limited. So, I’ve condensed this list to the few actions you can take that will give you the biggest return.
1. Holiday Spending Plan
Black Friday, Cyber Monday, gifts, travel, New Year's plans. Your holiday spending is probably about to spike (if it hasn’t already).
The key to enjoying this season and feeling good about your spending is having a strong plan. Here are 2 tips:
Imagine it's a month from now and you're reviewing your spending. What number would you feel good about? At what point would you start to feel guilty? Dial in your number so you can plan your spending with confidence.
As I shared with MarketWatch this week, challenge yourself to take one positive money move before your next holiday purchase:
“Maybe it’s checking that you’re getting your employer match on your retirement plan before the year-end deadline. Finding an unused subscription to cancel. Adding an extra $50 to your emergency fund. Whatever you choose, take a small, meaningful step that invests in your future self…”
2. Your financial snapshot:
Calculate your net worth. If you've never done this, take all of your assets (checking, savings, investments, etc.) and subtract your liabilities (student loans, credit card debt, etc.). This establishes your net worth baseline going into 2026.
If you track it already, update it, and notice what made the biggest impact. How much of the change came from your savings versus market movements? The market’s performed well so far this year, so separating market gains (volatile) from savings (in your control) keeps expectations realistic during less strong years.
3. Use-it-or-lose-it money:
Check your Flexible Spending Account (FSA) balance. That money generally expires on December 31st, so look for eligible medical expenses (review your Summary Plan description for these) to use it before you lose it.
4. Investment accounts:
Are you getting your full employer match? If not, can you bump up your December paycheck contribution?
More broadly, be sure to check your asset allocation. Does it still match your risk tolerance, or did 2025's market run leave you overweight in stocks or certain sectors (like Tech)? You can also review your investment expenses. Are you paying 0.5% annually for something you could get for 0.05%? Over the decades, that difference is pretty staggering.
Bonuses:
Tax-loss harvesting and tax-gain harvesting are both more advanced tactics with year-end deadlines. To see if either is right for you, check out Point #4 below. Both let you maximize your tax situation.
If you have children and a 529 plan, most states offer a tax deduction, but only if you contribute before December 31st.
Your Move: Which item on this checklist is both easy to execute and saves or makes you the most?
Point #3 — “What should I do before year-end?”
I'm 40, fall in high earner category, and new in financial planning journey. I've deposited $ to employer 401k, maxed out IRA and deposited some in Roth 401k. I made some mistakes this year and could not max out all of them this year. My kid was born this year and I'm thinking of opening a 529. I have not yet done that because I'm not sure whether university education will be valuable in 20 years. I plan to do something about it early next year. That being said, what are some things I should do before end of year?
First, it’s great that this individual is starting to take their personal finances more seriously. They’re investing and thinking long-term.
One thing that sticks out is maximizing contributions to their IRA. They note they consider themselves a “high earner.” If you participate in your employer’s retirement plan (like a 401(k)), and you make over certain income amounts ($79,000 to $89,000 in MAGI for Single, $126,000 to $146,000 Married filing jointly), your deduction is phased out.
That means you would only get ongoing tax-deferral benefits from your IRA, but still have to pay ordinary income tax when you pull the money out. Based on this, a Roth (potentially through a backdoor Roth contribution) could make more sense because earnings would be withdrawn tax-free.
As far as the 529 concerns, one consideration is the new tax law that went into effect earlier this year. This new bill expanded the eligible K-12 expenses, beyond tuition, to include curriculum materials, tutoring costs, and fees for standardized testing/college admission exams. The law also expanded eligible expenses to qualified postsecondary credentialing expenses.
That’s in addition to recent law changes that also allow up to $35K to be rolled into a Roth IRA for the beneficiary over time (subject to eligibility conditions).
Point #4 — Tax-Loss & Tax-Gain Harvesting, Explained
As mentioned in Point #2, tax-loss and tax-gain harvesting are two tax-saving techniques to maximize your investments before the year ends.
What they are exactly and when they make sense:
Tax-loss harvesting: This means selling investments that have lost value to realize the loss, which you can use to offset any capital gains or up to $3,000 of ordinary income on your taxes. You can immediately buy a similar (but not identical) investment to maintain your market exposure while capturing the tax benefit.
Tax-gain harvesting: Less well-known than tax-loss harvesting, tax-gain harvesting entails intentionally selling profitable investments in years when you're in a lower tax bracket. You may be in a lower tax bracket if you took a “gap year,” started a business, or took a sabbatical. This locks in gains at favorable tax rates now, reducing the taxes you'll owe when you sell these investments later at potentially higher tax rates.
Bottom line: Review your investments and check with your tax professional to see if you have any tax-loss or tax-gain harvesting opportunities. These moves can save you thousands in taxes.
Point #5 — Quotes of the Week
Continuing the “Checklist” theme, which of these is your favorite?
“We are all plagued by failures - by missed subtleties, overlooked knowledge, and outright errors. …Checklists seem to provide protection against such failures. They remind us of the minimum necessary steps and make them explicit. They not only offer the possibility of verification but also instill a kind of discipline of higher performance.”
“Checklist routines avoid a lot of errors. You should have all this elementary [worldly] wisdom and then you should go through and have a checklist in order to use it. There is no other procedure that will work as well.”
Point #6 — My Question of the Week
Which item from the checklist above would bring you the most peace of mind?
Reply to let me know! I read every response.
Thanks for reading — I hope you found a helpful idea or two.
I’ll see you next Saturday with more.
Have a great weekend,
Benjamin Daniel, CFP®
Founder, Money Wisdom
P.S. Want to take control of your money, stop stressing about your expenses, & feel confident about your financial future? There are 2 ways I can help you:
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Disclaimer:
This material is not investment or tax advice. No responsibility for loss occasioned to any person or corporate body acting or refraining to act as a result of reading this material can be accepted by the publisher.
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