This is the time of year when I typically offer financial planning advice to those who have the flexibility to make charitable gifts or plan ahead for taxes. But this year, more than ever, I am acutely aware of the millions of people to whom that advice doesn’t apply.

They are hard-working Americans struggling to make ends meet – to feed and clothe their children, to keep paying the rent or the mortgage, and to provide health insurance for themselves and their families. Or they are seniors whose budgets are strained by rising out-of-pocket medical expenses.

For them, my advice about staying out of debt is gratuitous. First, they’re probably not reading a personal finance column. And second, they may not have much choice to heed my warnings about the dangers of holiday spending.

The latest studies show that in 2025 as much as half of credit card spending each month (and in some studies as much as 72% of credit card spending) is done to cover essentials like food, utilities, prescriptions, and gas. Of course, many people use credit cards to accumulate rewards. But for others, credit card usage bridges the gap between paychecks or Social Security checks – and doesn’t get fully repaid at the end of the month.

The current reports on credit card balances also don’t fully reflect the debt consumers are carrying. That’s because the “Buy Now, Pay Later” industry that offers “four easy payments” does not report outstanding balances as consumer debt. But that debt can snowball – especially with holiday purchases.

So, my first year-end money tip is to talk about the issue of holiday presents with your family members. Not only your teens with their first credit cards, but to parents of young children who want to put presents under the tree. And, toughest of all, if you have aging parents, please tell them to stop the traditional holiday gifts and focus on their own tight budgets. You can relieve them of the stress of finding gifts for multiple grandchildren.

And now, for those who have flexibility to plan, here are some important year-end steps:
• Take your RMD. If you’re 73 or older you must take a required minimum distribution from your retirement accounts. See last week’s column, posted at TerrySavage.com, for full details on calculating and withdrawing the money. Do not wait until the last minute, as fines are significant.

• Qualified Charitable Contributions. If you’re in the fortunate position of not needing to spend the money from your RMD, you can follow the rules on giving money from your IRA directly to a qualified charity. It will be counted against your RMD requirement. But, make sure the charity actually receives, and acknowledges, the contribution before year-end. There are age, and gift limitations to this opportunity. For 2025, the annual QCD limit is $108,000 for individuals or $216,000 for eligible married couples with separate retirement accounts.

• Accumulate Deductions before year-end. The cap on deducting state and local taxes, such as property taxes, has been increased to $40,000 this year. If you pay a huge tax bill, it might become worthwhile to itemize your deductions – and pay those January property taxes before year-end to count as 2025 expenses. Consult with your accountant.

• Annual Gift Exemption. This year, you are allowed to gift anyone as much as $19,000 to anyone, or multiple people, without filing a gift tax return. This annual gift exclusion does not count against your huge estate tax exemption. For wealthy families, it is an opportunity to give money away tax-free. However, do not impoverish yourself in your old age, just to use this exemption!

• Make 529 Plan Contributions. This is the time to add to your child, or grandchild’s 529 College Savings Plan. For details on how that works search the columns at TerrySavage.com. It is a long- lasting holiday gift that grows tax-free for college expenses, and the account has minimal impact on financial aid.

• Consider January 15th Quarterly Tax Estimates. If you have significant untaxed income, perhaps from a side job or a pension, you might owe quarterly estimated taxes on January 15th. Consult your tax preparer now and set some money aside if you fall into that category. This year, you’ll need to pay taxes online, so be sure to set up an account at IRS.gov/payments. That payment must be made just as your holiday credit card bills arrive!

A final note: Even if you’re not itemizing deductions, the holiday season is a wonderful time to expand your charitable giving. The news headlines make clear that many people in your community are suffering, and will turn to local food pantries to make ends meet.

No one wants to think about debt and taxes as we go into the holiday season. But better to be prepared than blind-sided in January. That’s the Savage Truth.