While the days leading up to New Year’s Eve are often spent reflecting on the year gone by, the last few days of the year are a great time to make plans for the New Year. Personal health goals like weight loss, healthy eating, and exercise are almost always at the top of the list, but, what about our financial health? The New Year is a perfect opportunity to take a look at our personal finances and set healthy financial goals for the year.

6 Ways to Improve Financial Health in the New Year

1. Contribute to Retirement Accounts – If your employer offers a retirement plan like a 401(k) or 403(b), make a plan to set aside a fixed amount each month to be automatically deducted from your paycheck. Aim to contribute as much as you can, up to the maximum allowed. At the very least, make sure you’re contributing enough to take full advantage of any employer match.
2. Consider an IRA Contribution – Even if you can contribute to an employer plan, you can probably still contribute to a Traditional or ROTH IRA. An IRA provides either a tax-deferred or tax-free way to supplement your retirement.
3. Plan for Emergencies – There’s no escaping financial surprises like a job loss, illness, or natural disasters. It’s critical to your financial success that you have a financial plan to handle the unexpected. To help you reach your emergency savings goal, set up an automatic transfer from your paycheck into a designated savings account so that you are prepared.
4. Pay Down Debts – Set a goal for how much you plan to pay down on your personal loans, credit cards, and mortgage. If you owe money on multiple credit cards, set a goal for how much you can realistically pay off in 2025. Start with the highest interest rate cards and, for best results, avoid using those high-rate cards. Consider paying extra toward your mortgage principal each month to cut down on the number of years it will take to pay off your mortgage.
5. Review Your Credit Report – Every year we remind members to take a look at your credit report. You can get a free copy of your credit report annually from each credit bureau. Mistakes (and fraud) happen, so it’s important to review and correct any issues. A poor credit report impacts your ability and the cost to borrow in the future!
6. Review Life Insurance – As you move through life, your life insurance needs to continue to evolve and change. Think about how much life protection you need and compare it to the coverage you have. Include any insurance provided by your employer.

The 50-20-30 Rule

A common rule of thumb for setting your budget is the 50-20-30 rule. U.S. Sen. Elizabeth Warren popularized the 50-20-30 budget rule in her book, “All Your Worth: The Ultimate Lifetime Money Plan.” The 50-30-20 rule involves splitting your after-tax income into three categories of spending: 50% goes to needs, 30% goes to wants, and 20% goes to savings. Click here to read more about setting up your 2025 budget using this guideline.

The Bottom Line for New Year Financial Goals

The end of the year is an excellent opportunity to reflect on your financial situation and reset your goals for the upcoming year. It’s a time to assess where you stand financially, celebrate any progress you’ve made, and adjust your strategies for the future. However, when setting your financial resolutions, it’s important to strike a balance—while ambition can be motivating, setting too many goals or unrealistic targets can lead to frustration and burnout.

When you spread yourself too thin or set goals that are difficult to achieve, you may find it hard to stay on track or accomplish any of them. Instead, focus on a few key, actionable goals that align with your overall financial objectives. Prioritize what matters most—whether it’s paying down debt, saving for a major purchase, building an emergency fund, or investing for the future. Breaking these larger goals down into smaller, manageable steps can also help keep you motivated and give you a clearer path to success.

Remember, financial well-being is a marathon, not a sprint. Setting realistic goals and giving yourself the time and flexibility to adjust as needed will help you make meaningful progress without feeling overwhelmed.

If you’re unsure where to start or need help creating a financial plan that works for you, don’t hesitate to reach out. We’re here to guide you through the process and answer any questions you may have, so you can begin the new year with confidence and clarity about your financial future.