20 Tips to Optimize Your Finances Before the End of the Year

1. Check Tax Credits And Deductions

Now’s the time to get your spending in order before the end of the year. It’s a great way to optimize your finances.

In fact, certain expenses are eligible for tax credits, such as renovations to make a dwelling accessible to the elderly. If these are expenses you plan to make in the next few weeks or months, make them before the end of the year. That way, you’ll be able to claim your tax credits on your next tax return, rather than waiting until the following year.

In addition, check which expenses can be deducted from your taxable income, such as child care, medical, tuition and moving expenses. If you meet the eligibility criteria and these expenses are incurred by December 31 of this year, you’ll be able to include them on your income tax return for the current year.

In short, check the tax credits and deductions to which you are entitled.

2. Contribute to FHSA

If you want to buy your first home, contributing to the FHSA is undoubtedly the most effective tool. In addition to receiving a tax refund for your contributions to the plan, you’ll be able to withdraw the funds tax-free for the purchase of your first qualifying property. You can contribute a maximum of $8,000 per year, with a lifetime limit of $40,000. It’s an excellent way to optimize your finances and taxes, while making your dream of home ownership a reality.

However, be mindful of deadlines. Unlike an RRSP, which allows contributions during the first 60 days of the following year, the deadline to contribute to a FHSA (Tax-Free First Home Savings Account) is December 31. If you plan to contribute to your FHSA in January, your deduction will be deferred to the next year. You could consider advancing your FHSA contribution to December to claim your deduction on your next tax return.

Finally, you can also contribute to your RRSP before the end of the year, to eventually use the Home Buyers’ Plan (HBP). However, for the reasons outlined above, you can still make these contributions during the first 60 days of the following year.

3. Contribute to an RESP

It’s often said, but the Registered Education Savings Plan (RESP) is the best way to save for your child’s post-secondary education. In fact, your contributions to the plan entitle you to a grant of 20% from the federal government and 10% from the Quebec government. Depending on your household income, these grants may be higher.

However, the grants are not paid out at the same time. The federal grant is paid the month following the RESP contribution, while the Quebec grant is paid in late spring for the previous year’s contributions.

So, if you contribute to the RESP by December 31, you will receive the grant from Quebec in the spring of 2027. However, if you make the same RESP contribution in January 2027, you won’t receive it until the spring of 2028.

4.Contributing To Catch Up On RESP Contributions

If you haven’t contributed the maximum possible to your child’s RESP since their birth, you can make catch-up contributions. You are allowed to contribute up to $5,000 per year, $2,500 for the current year and $2,500 for unused contribution room from previous years. Making catch-up RESP contributions enables you to recover as much grant money as possible. It’s a great strategy to optimize your finances and secure your child’s educational future.

5. Contribute to the RDSP

Less well known, the Registered Disability Savings Plan (RDSP) is a tax-deferred savings plan for Canadians eligible for the Disability Tax Credit (DTC). RDSP contributions are eligible for grants ranging from 100% to 300%. If you or a loved one is eligible for the RDSP, make a contribution before the end of the year to obtain the grants.

6. Make a Final RRSP Contribution

If you turn 71 in 2026 (or by December 31), you’ll need to convert your RRSP to a RRIF – more on that later. However, you may also want to contribute to your RRSP one last time. Even if you turn 71 in 2026, you can still contribute to your RRSP until December 31. After that, you’ll never be allowed to contribute again. Depending on your financial goals and the income you’ve earned this year, making a final RRSP contribution could be a good way to optimize your finances.

7. Wait for RRSP Withdrawal

If you’re planning an RRSP withdrawal to purchase a qualifying first home (HBP) or to return to school (LLP), consider waiting until January to make your withdrawal. Although these RRSP withdrawals have no tax impact, you must repay the amounts within the prescribed period. So, by postponing your RRSP retirement until January, you also postpone the start of the repayment period by one year. We’re talking about substantial sums (especially for the HBP), so this can have a considerable impact on your finances.

8. Making a TFSA Withdrawal

Contrary to the previous point on RRSP withdrawals, it is preferable to make a withdrawal from your Tax-Free Savings Account (TFSA) by the end of the year. In fact, if you plan to withdraw money from your TFSA in early 2027, it would be more advantageous to do so by December 31, 2026. That way, you can get your TFSA contribution room back as early as January 1, 2027, rather than waiting until 2028. It’s a good strategy for optimizing your finances, and allowing you to put money back into your TFSA sooner.

9. Realizing Capital Losses To Save Money

For individuals, the capital gains inclusion rate remains 50%: half of a capital gain is added to your taxable income. The proposed increase to two-thirds was never implemented and was cancelled (Canada Revenue Agency, checked on October 7, 2026).

To optimize your financial and tax situation, you may wish to analyze your gains and losses before December 31. If it’s advantageous for your financial situation, you could use your capital losses to reduce your capital gains for the current year. In fact, capital losses can be used to reduce gains in the 3 preceding years or in future years, thereby reducing your tax liability.

For example, if you have significant capital gains and you have investments that have decreased in value, you could sell these investments to realize a loss. Then deduct that loss from your gains. However, you only have until December 31 to use this trick.

10. Optimize Your Charitable Donations

Of course, you don’t make charitable donations to save money. But if you do make charitable donations, or are planning to do so, you can optimize your tax situation at the same time.

Charitable donations entitle you to a tax credit from both the federal and Quebec governments. This tax credit is more generous for the portion of your donations that exceeds $200 (it increases from 14% (2026 rate) to 29-33% federally and from 20% to 24-25.75% in Quebec). Additionally, you can combine your donations with those of your spouse.

For example, if you’ve donated $175 to date, and are planning to donate again in 2027, donate earlier (before December 31) to exceed the $200 threshold.

In short, combine your donations with those of your spouse, and donate before the end of the year to obtain this tax credit on your next income tax return. It’s a good strategy for optimizing your personal finances.

11. Bundle Your Medical Expenses

If you have medical expenses that are not covered by a public or private insurance plan, such as dental care or eyeglasses, you may be eligible for a tax credit. However, only expenses exceeding 3% of net income or a certain amount are eligible for the tax credit. What’s more, these medical expenses must be accumulated over a 12-month period ending in the current year.

In short, if you have high medical expenses, try to keep them within the same 12-month period. It’s just another way to optimize your finances with a tax credit.

12. Convert Your RRSP Into A RRIF

If you’ve turned 71 this year or by December 31, you’ll need to convert your Registered Retirement Savings Plan (RRSP) to a Registered Retirement Income Fund (RRIF). Then, starting the following year, you’ll have to start disbursing from your RRIF, based on mandatory minimum withdrawals – as discussed in the following practical tip.

13. Make A Mandatory RRIF Withdrawal

If you turn 72 this year, you must make at least one withdrawal from your Registered Retirement Income Fund (RRIF). The annual amount you must withdraw from your RRIF is determined by your age and a percentage set by the government. This amount must be withdrawn by December 31 at the latest. RRIF withdrawals are taxable, so plan your disbursement strategy accordingly.

14. Making An Assessment And Preparing A Budget.

The end of the year is a good time to take an annual assessment of your income, expenses, and savings. You can then review your expenses with the goal of optimizing your finances.

With this year-end balance sheet, you can take the opportunity to prepare a budget for the coming year. In case you need it, download our free dynamic budget Excel file (available in our toolbox).

If you have debts, you may want to put a plan in place to pay them off as quickly as possible. There are solutions, but you have to make the effort. Consult the following guides to learn more.

15. Review Your Estate Plan

Year after year, significant changes occur in your life, such as getting married, having children, etc. Therefore, it is essential to keep all your important financial documents up to date. This includes your estate plan, insurance policies, and the beneficiaries of your investments.

Take advantage of year-end to ensure that your financial documents are up to date. In addition, make an appointment with a professional to review your estate plan and other important documents.

Bottom Line

In summary, December is the last opportunity of the year to optimize your finances. In fact, several of the personal finance tips explained in this article must be applied by December 31; otherwise, certain tax credits, deductions, and grants will be deferred to the following year. The end of the year is also a great time to take an annual assessment, set your financial goals, and prepare a budget for the upcoming year.