2025 is right around the corner! Are you ready? Creating a set of goals for the New Year can help provide a clear path forward and set up a framework for building financial security and wealth.
Here’s a set of achievable and impactful financial goals for you for the new year:
1. Review and Strengthen Budgeting Skills
Goal: Create or refine a personal budget and track spending consistently throughout the year.
Action Steps:
Use a budgeting tool (e.g., Mint, NerdWallet , or a spreadsheet).
Categorize expenses to identify areas where you can cut back.
Set monthly budget goals and review them weekly.
2. Build or Strengthen an Emergency Fund
Goal: Save 3-6 months’ worth of living expenses for emergencies.
Action Steps:
Start small—aim to save $500 or $1,000 within the first three months.
Set up automatic transfers to a high-yield savings account.
3. Pay Down Debt
Goal: Reduce or eliminate high-interest debt (e.g., credit cards, payday loans).
Action Steps:
List all debts and their interest rates.
Choose a repayment strategy (e.g., debt snowball or avalanche method).
Make extra payments when possible or negotiate lower interest rates.
4. Start or Increase Retirement Savings
Goal: Contribute to retirement savings, aiming for at least 10-15% of income.
Action Steps:
Open an IRA or contribute more to an existing 401(k).
Set up automatic contributions that align with pay cycles.
Review investment allocations to ensure they align with your risk tolerance and goals.
5. Build Credit Score
Goal: Improve or maintain a good credit score (700+).
Action Steps:
Check your credit score and report for free (e.g. Credit Karma).
Pay bills on time and reduce credit card balances to below 30% of the limit.
Dispute any inaccuracies or errors on the credit report.
6. Create and Begin Investing
Goal: Begin or expand investments in low-cost index funds, ETFs, or other investment vehicles.
Action Steps:
Research investment options or work with a financial advisor.
Open a brokerage account or a tax-advantaged account like a Roth IRA.
Start by contributing small amounts and increase as you become more comfortable.
7. Set Clear Financial Goals and Track Progress
Goal: Define specific short- and long-term financial goals (e.g., buying a home, funding education, or starting a business).
Action Steps:
Write down specific, measurable, and realistic financial goals.
Break them into smaller milestones and review progress quarterly.
Track success using a financial app or spreadsheet.
8. Review and Adjust Insurance Coverage
Goal: Ensure that your insurance policies (health, life, auto, home, etc.) are up to date and cover your needs.
Action Steps:
Review your policies with an insurance expert to ensure adequate coverage and competitiveness.
Shop around for better rates or coverage where necessary.
Consider increasing life insurance or disability coverage if you have dependents.
9. Maximize Tax Efficiency
Goal: Optimize tax planning and reduce the tax burden for the year.
Action Steps:
Set up quarterly tax payments if you’re self-employed.
Max out tax-advantaged accounts (401(k), HSA, IRA) where possible.
Consider consulting a tax advisor to review deductions and credits.
10. Increase Financial Literacy
Goal: Commit to improving financial knowledge and decision-making.
Action Steps:
Read at least one book or complete one course related to personal finance each quarter.
Attend webinars, listen to financial podcasts, or engage in online communities.
Regularly review personal finance blogs and news to stay informed.
By establishing a mix of short-term, measurable goals and long-term plans, you can stay motivated and on track for financial success throughout the year. Be sure to review your goals regularly and adjust as needed, and to celebrate the wins along the way!
Your financial coach,
Chetara Lee, Ph.D., AFC
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