Start Fresh with Your Finances

The start of a new year is the perfect opportunity to review your financial goals and create a plan to help you stay on track. A checklist is a simple but effective tool to ensure you are on track to meet your long-term financial goals.

Here are six steps you can take to get you started for 2025.

Revisit your budget.

Reviewing your budget annually allows you to trim unnecessary expenses and reallocate funds to more important financial goals. Begin by evaluating your monthly income alongside your fixed expenses, such as rent or mortgage payments, loan payments, car payments, and utility bills. Next, take a look at your variable expenses, which include gas, groceries, entertainment, clothing, and travel. After that, establish your financial priorities for 2025 to help you update your budget effectively. For instance, you could reduce dining out by cooking at home more often, switch to a more affordable phone or insurance plan, or cancel unused subscriptions, like streaming services or gym memberships. If you haven’t already created a budget, now is a great time to get started.

Set clear financial goals. 

Setting clear financial goals for 2025 is essential for maintaining focus and making measurable progress toward your financial aspirations. Before creating new goals, take time to review the goals you set for 2024—identify which ones you achieved, which ones you didn’t, and the reasons behind any shortfalls. This reflection helps you understand what worked, what didn’t, and how to improve. With this insight, you can set more realistic goals for the new year.

Build an emergency fund.

Life’s uncertainties can play a huge role in your financial stability. Building an emergency fund can help safeguard you from unexpected life events like job loss, medical emergencies, or other significant expenses. A general rule of thumb for an emergency fund is three to six months’ worth of living expenses, but don’t let that intimidate you. Start small by setting up automatic transfers of $50 to a savings account each pay period, and by the end of the year (assuming you receive 26 pay periods) you will accumulate a total of $1,300 to help you reach your goal. A high-yield savings account is an ideal place to keep your emergency fund because it allows you to earn interest on your deposits through compounding interest. This means you earn interest on both your initial savings and any interest you’ve already earned. As a result, the longer you save, the more your money can grow.

Review your debt.

Reviewing your debt at the beginning of the year is crucial for setting clear financial goals and gaining control over your finances. By taking stock of what you owe, you can create a realistic payment plan to tackle that debt. Two methods to pay off debt are the debt avalanche method and the debt snowball method. The avalanche method tackles debt with the highest interest rate first, working down to the lowest interest rate. The snowball method focuses on making the minimum payments on all debts and applying additional funds towards the smallest balance. Starting the year with a complete understanding of your debt helps you make informed decisions, improve your credit health, and stay on track to meet short- and long-term financial goals.  

Update your estate and insurance plans.

The start of a new year is a great time to review and update your insurance policies to ensure they meet your current financial needs. Develop a comprehensive estate plan that includes a will, trust, power of attorney, and healthcare directives. Review your estate plan periodically to reflect changes in your financial situation, family dynamics, or legal regulations. To help you get started on your estate planning journey, we partnered with Trust & Will to offer our members an exclusive discounted rate of 20% off any estate plan.

Review your current bank accounts and products.

Reviewing your current accounts and products is essential to ensure they align with your financial goals and needs. If your priority for 2025 is to save, you might find that a traditional checking or savings account isn’t maximizing your potential for growth. In such cases, consider switching to a high-yield checking account, like Premium Checking, which often offers a higher APY* and can help you grow your savings more efficiently. Other savings products to check out would include a money market or a share certificate.

Starting fresh with your finances in the new year is an empowering way to take control of your financial future. By taking the abovementioned steps, you can help set yourself up for success, creating a solid foundation for long-term financial stability and growth.

*APY = Annual percentage yield.