As we embark on a New Year, this is the time we all begin to take stock of where we are, and we think about ways to improve our overall lives and well-being. What can we do this year that we may not have gotten around to last year? How can we be better?

Outside of health and family, most people would say their money and finances are important. Money is a tool that helps to ensure those we love and care about are provided for, and it helps to enhance our quality of life.

Maybe you’ve thought this is the year to get on track. We think so too! Here are some key areas to review in order to help you see the big picture and make 2025 a financial success.  

How to be better with your money this year

From our own experiences, we realize that many of these goals are already broken early in the year, so we decided to focus this article on habits to work on rather than goals to work toward. These habits are small steps you can take that add up exponentially down the road.

See below for some habits that we recommend you start doing every time a new year rolls around.

1. Review Any Changes to Your Budget Going into The New Year

Did you receive a raise? Have any of your expenses (taxes, insurance, subscription fees, etc.) increased since last year? Did you pay off any debts, or are you on track to pay off any debts this year?

If so, it might be time to re-visit your budget by writing down your anticipated monthly net income and your typical monthly expense items (i.e., housing, transportation, kids, pets, food, personal care, insurance payments, and debt payments).

This does not mean you actually have to start following a budget, but just doing this exercise can show you how much wiggle room you have each month for unexpected expenses, how much you can expect to see your savings increase by each month, and how much is available to dedicate toward other goals.

2. Review Your Savings Goals

Do you have enough savings in the event of an emergency (i.e., loss of job, car breaks down, new roof, new furnace)? The typical recommendation for how much to keep in savings ranges from 3 to 6 months’ worth of expenses.

There is no one size fits all. The right amount for you will depend on how many income earners are in the household, the stability of jobs, etc.

Is it time to increase your retirement account contributions? According to the IRS, for 2025, if you are under age 50, the maximum you may defer to your company’s 401(k) or 403(b) is $23,500.  If you have attained age 50-59 or are age 64+, you may contribute a catch-up contribution in the amount of $7,500 for a total deferral of $31,000.  Beginning in 2025, if you are age 60, 61, 62, or 63, you may contribute a ‘super catch-up contribution’ in the amount of $11,250 for a total deferral of $34,750. ​

💡 A good habit of getting into is increasing contributions by 1% each year, plus additional if you received a raise or paid off any debts recently.

Review any other investment accounts, such as college savings accounts (529 plans) and health savings accounts, for annual limits and tax benefits to determine if you can and should increase savings in any of these areas.

4. Review How You Have Your Money Invested

2024 may have been a challenging your for you as an investor. You may have been surprised at how poorly your investments performed, making you question how you’ve been invested.

Have your investment goals or risk tolerance for investing changed? It is always a good idea to review how the money in your different accounts is invested and confirm that those investment portfolios align with your goals and comfort level for investing.

5. Review Your Situation, Considering Any Life Changes that Recently Happened or Will Be Happening in The New Year

Did you have any major life changes happen in the last year that would trigger the need to review your financial plan? (i.e., retiring, getting married, having kids, death, divorce).

Life can change quickly. It is a good time to review your insurance and estate plans. Consider if your life insurance needs have changed or if you need to update your will or other estate planning documents. Also, consider reviewing your beneficiary designations. Double-check any investment accounts or insurance policies you own.

Not sure how to implement these recommendations? Financial planning can help you balance and build a plan around the abovementioned areas.

There is no one-size-fits-all when it comes to what you should be doing with your money. We’d all love a little more clarity regarding our money and life.

A fee-only financial planner, with a fiduciary obligation to you, can help you understand where you are today, how to get to where you want to go, and how to see the big picture – helping you make 2024 a financial success.