The end of the year provides a good opportunity for reflection. The past 12 months brought plenty of opportunities to make financial strides — and plenty of potholes and challenges.

A lot of Americans struggled with money issues, but others flourished. Whether your final ledger for 2021 puts you in the plus or minus column, these practices and behaviors can help going forward, especially if resurfacing pandemic pressures pose new money obstacles in the new year.

1. Build up that emergency fund

It’s a fairly straightforward tip but many Americans still haven’t achieved it: Amass enough money in reserve to meet unexpected job or other financial demands.

In a recent survey by the Transamerica Center for Retirement Studies, 43% of respondents said they suffered one or more negative employment jolts such as a job loss, furlough, reduced hours, reduced pay or unexpectedly early retirement. All that’s in addition to nonwork financial stresses ranging from an air-conditioner breakdown or an unexpected hospitalization to someone stealing the catalytic converter off your car.

Consequences of not having an emergency fund can include reliance on expensive, short-term check-cashing services or needing to make premature withdrawals from retirement accounts.

If you have had difficulty saving before, it might be better to focus on simply getting started and not worrying about how much you ultimately need to amass. Like a journey of 1,000 miles starting with that first step, the initial goal here is to begin with the first dollar, $50 or $100 — and to keep adding to it over time.

Ultimately, you will want to compile enough money to cover at least three months of routine expenses, though a six-month reserve would put you on sounder footing. Your reserve should be stashed in a liquid vehicle such as a bank savings account or money-market mutual fund, not an investment account that could trigger transaction fees or taxable gains if you needed to access it frequently.

2. Stay ahead of student-loan debt

The federal student loan deferment period was set to end Jan. 31 but recently was extended to May 1. Whenever it ends, plenty of borrowers might need to take action to stave off financial problems. In a new report by and, 69% of borrowers anticipated needing to take action to afford the monthly payment. Also, 75% said the resumption of payments in February will negatively affect their finances.

Actions borrowers said they might need to take include cutting back on spending (cited by 32%), finding a higher paying primary job (26%), taking on a second job or side hustle (25%), selling personal belongings (19%), finding cheaper living arrangements (15%) and borrowing elsewhere such as from family members or friends (13%).

Consequences could include having less money to save or less money to spend, along with increased difficulty in paying other debts. Just 36% of respondents said they continued to repay their student-loan debts during the deferment period, and many of these people said they paid less than normal.

3. Take advantage of tax incentives

It goes without saying that everyone wants to minimize taxes. But do investors take advantage of tax-sheltered strategies and vehicles to the extent possible? No.

For reasons ranging from a lack of funds to a lack of knowledge, many people don’t use available incentives. For example, most workers don’t max out contributions to workplace 401(k) plans and many don’t even contribute enough to receive full employer matches. As for Individual Retirement Accounts, only about 1 in 10 account holders contributes money in a given year, even though many more are eligible.

Health Savings Accounts, typically offered as a workplace benefit, are another example. These accounts potentially offer three tax advantages. Contributions go in on a tax-sheltered basis, account earnings grow tax-deferred and the money comes out tax-free if used to pay for any of a multitude of qualifying medical expenses.

To use an HSA optimally, account holders should maximize their contributions, invest in stock funds or other growth investments rather than cash and avoid withdrawing prematurely as much as possible, according to the Employee Benefit Research Institute. But the group contends relatively few people follow all three suggestions. It has called on employers to explain HSA benefits more effectively so workers can better take advantage of them.

4. Keep things in balance

The past two years were anything but routine. For stock market investors, early 2020 was marked by one of the sharpest but shortest declines ever, followed by a steady, powerful rebound. Now, the market is struggling again. It’s a good time to focus on sticking to a long-term investment plan, and rebalancing can help.

That is the idea of making gradual adjustments to keep a portfolio roughly in line with how you set it up and want it to stay. Suppose your long-term goal is to hold 60% of your assets in stocks/stock funds and the rest in bonds/cash. Now, after a stretch of mostly strong gains for stocks and sluggish fixed-income results, suppose the mix is 70%-30%.

If so, you can rebalance by trimming your stock positions and investing the proceeds in bonds or cash to get back to a 60%-40% mix. You can also make other rebalancing changes such as diverting some U.S. stock holdings into foreign markets.

Rebalancing can help keep your portfolio from becoming too risky after long rallies, and it forces you to buy back in after slumps. It’s thus a way to buy low and sell high.

There’s no set formula for rebalancing — you can do it once a year or after your portfolio mix moves out of alignment by perhaps five percentage points. It’s easier to do in tax-sheltered vehicles such as workplace 401(k) plans. In unsheltered accounts, rebalancing can trigger taxable gains or losses.

While rebalancing makes sense, many investors are reluctant to do it. When stocks or other assets are surging, greed sets in and many people don’t like to take profits. When stocks are sliding, investors grow fearful of committing more cash. But as it’s difficult to predict market turning points, especially with emotions in the way, rebalancing is a discipline that can keep you on track.