As 2024 draws to a close, you may be considering your financial objectives for 2025.
Financial resolutions can help you stay motivated, whether you’re saving to pay off student loan debt or move out of your parents’ house, according to Courtney Alev, a consumer advocate with Credit Karma.
According to Alev, the start of a new year does not mean that all of our financial difficulties from the previous year are gone. However, it might be really beneficial to approach your financial management with a new perspective.
Experts advise assessing your financial situation in 2024 as the first step in any financial resolutions you may be making for the new year. Next, establish clear objectives and confirm that they align with your lifestyle.
Here are some expert tips:
Change your relationship with money
Consider your present financial situation.what is positive, what is negative, and what may be made better.
Ashley Lapato, a personal finance instructor for the budgeting program YNAB, advised making 2019 the year to transform your relationship with money.
It’s time to shift your mindset if you believe that money is a hassle, that discussing money is shameful, or that you were born with poor money management skills, Lapato advised.
Lapato advises changing your strategy by seeing financial objectives as a chance to envision the kind of life you want to lead in the future. She suggests posing queries such as, “How do I look in my 30s?” How do I look in my forties? and getting there with the help of money.
In order to enter the new year with enthusiasm, Liz Young Thomas, head of SoFi Investment Strategy, noted that it’s critical to forgive oneself for previous transgressions.
Know your why
According to Matt Watson, CEO of Origin, a financial tracking tool, it’s critical to determine the purpose behind each of your 2025 financial goals.
According to Watson, it’s lot more motivating and likely that you’ll stick with the money objective if you can tie it to a larger life goal.
Having a clear objective will help you stay motivated, whether your aim is to pay off credit card debt, save for a summer trip, or purchase a home. Additionally, Watson suggests using a website, spreadsheet, or app to help you manage your money.
Budget, budget, budget
According to Greg McBride, chief financial analyst at Bankrate, your wage increases are probably still not keeping up with your monthly spending after three years of inflation, leading you to wonder where all the money is going. Establish a monthly spending plan for 2025 and make a commitment to monitor your expenses all year long.
According to McBride, you might have to make changes throughout the year as some costs rise, necessitating reductions in other areas.
Adjust your spending based on your income, and if you spend less than you planned for any given month, put the extra money into a savings account—preferably one with a high yield, he advised.
Pay down outstanding debt
You’ll still need to work hard to pay off debt, especially expensive credit card debt, and do it quickly because interest rates aren’t going to drop very soon, McBride said.
Start by calculating your current debt load in comparison to the start of the year. McBride advises creating a strategy if you’ve gone the other way, but ideally you’ve made consistent work toward paying it off. Examining offers for 0% balance transfers is part of it.
Take control of your credit card interest rate
According to Matt Schulz, chief credit analyst at LendingTree, you have more control over credit card interest rates than you may realize. One of the best things you can do in 2025 is to use that power.
A transfer of 0% of the balanceAccording to him, credit cards are an effective tool for combating high annual percentage rates, or APRs. Another choice is a personal loan with a low interest rate.
Asking for a cheaper interest rate over the phone might be all you need to do. Most people who did that in 2024 were successful, according to LendingTree, and the average reduction was more over six points.
Set realistic, practical goals
According to Alev of Credit Karma, it’s crucial to think about how you’ll make your financial resolutions sustainable for your way of life when making plans.
According to Alev, it’s actually a marathon rather than a sprint.
Setting attainable, realistic goals will help you stay on track, according to Alev. For instance, start saving $20 per paycheck rather than aiming to save thousands of dollars by the end of the year.
You will occasionally get sidetracked, even if your plans are realistic. Perhaps it’s a remarkable life experience or an unforeseen medical expenditure. Alev advises attempting to avoid feeling defeated in these circumstances and aiming to get back on track guilt-free.
Don t flamingo or bury your head in the sand
Set a New Year’s goal to check your credit score every month in 2025 because you can’t control what you can’t see, according to VantageScore chief economist Rikard Bandebo. One of the easiest strategies to raise your credit score is to make sure you pay more than the minimum amount due on your credit accounts.
Additionally, because servicers will start reporting late payments in January and because missed payments will have an impact on borrowers’ credit ratings, Bandebo recommends student loan borrowers to make all of their payments on time.
Automate savings, where possible
Increased workplace 401(k) plan contributions, direct payroll deposits into designated savings accounts, and monthly transfers into an IRA and/or 529 college savings accounts are examples of automated adjustments that quickly mount up, according to McBride.
Slow down
Your financial objectives may include more than just improving your money management; they may also include protecting your funds from fraud. Slowing down is the best way to avoid scams, according to Johan Gerber, Mastercard’s vice president of security solutions.
“If you’re not sure (whether or not) it’s a scam, you have to slow down and talk to other people,” Gerber said, adding that in order to protect yourself and your loved ones, you need establish an accountability system with your family.
Taking your time while making any financial decisions will help you avoid losing money because scammers utilize hurry to deceive people.
Focus on financial wellness
Your financial objectives don’t always need to be based on monetary values; they can also be related to your general well-being. We must take care of ourselves in order to take care of our finances, which are closely related to our mental health.
I think that now more than any other year, your financial wellness should be a resolution, said Alejandra Rojas, personal finance expert and founder of The Money Mindset Hub, a mentoring platform for women entrepreneurs. Money should be a remedy for your mental health.
You can establish one or two goals that center on your connection with money in order to concentrate on your financial wellbeing. For example, you could find ways to address and resolve financial trauma, or you could set a goal to talk more openly with loved ones about money, Rojas said.
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