By These years seem to pass by before we know it. Going into 2024, some of you may have said “This is the year I _______,” and then you blinked and it’s December. That’s why it’s so important as we turn over into 2025 to have a solid plan to position yourself for financial success. I’m going to mention four areas to look at, but your individual plan may look different. Either way, taking care of these things now can help ensure that your money works effectively for you throughout the year.
1) Set your financial goals.
How much do you want to have saved by this time next year? What big purchases do you need to make, or is there a home improvement project you’ve had your eye on? Forecast what’s on the horizon now, and you’ll be able to mitigate any surprises that may arise.
2) Hone in on your budget.
When was the last time you updated your budget? Often people get salary increases, cash influxes, or other big changes throughout the year. Review your budget now and find space where you may be able to increase your retirement contribution, put more money into the markets, or add that gym membership you’ve been putting off.
3) Refocus your investment accounts.
Hopefully, you have at least a 401(k). If not, go back to tip #2. If you do, the start of the year is a good time to see if it needs to be rebalanced. Younger folks often choose an aggressive allocation, knowing that, while past trends don’t guarantee future returns, the market tends to go up over time. As an FFP client, we will take a closer look at your allocations and educate you on your options, but in general, you want to make sure that your accounts are working as hard as they can for you.
4) Update your insurance.
While all companies have different open enrollment periods for workplace benefits, take the time now to look at your benefits. Are you fully maximizing what your company offers? Have there been any major life events like a wedding, birth, or health issue that require additional insurance? Does it make sense to get a private policy, or do your work benefits cover what you need for now? Take advantage of everything available to you to be prepared in the case of a life-altering situation.
Every year is full of surprises. Having a clear plan for your finances helps ensure that you’re prepared to tackle them. Working with a financial planner is a great way to build a plan with a trusted advisor who can walk with you every step of the way. If you’re ready to start that relationship, reach out to our team today for a consultation and see how we can help set you up for a successful financial year.
Article by Jacob Buckley, CFDA, MBA, Wealth Advisor at Family Financial Partners — a financial services firm in Lexington, Kentucky.