Educational

2025: New Year’s Financial Resolutions For A Brighter Future

December 9, 2024

As we bid farewell to 2024 and welcome 2025, many of us are taking the opportunity to reflect on our financial goals and aspirations. Whether you’re a financial newbie or a seasoned pro, the start of a new year is the perfect time to reassess your financial situation and make positive changes.

Let’s explore the best strategies for financial success for beginners and provide you with a roadmap to achieving your financial goals in 2025.

1. Set Clear and Achievable Goals

Before you can start working towards financial success, you need to define what that means to you. Take some time to reflect on your financial goals, and make sure they’re specific, measurable, achievable, relevant, and time-bound (SMART). For example:

• Pay off $5,000 in credit card debt within the next 12 months.
• Build an emergency fund to cover 3-6 months of living expenses.
• Increase your savings rate to 20% of your income.

2. Prioritize Debt Repayment

High-interest debt, such as credit card balances, can be a significant obstacle to financial success. In 2025, make it a priority to pay off high-interest debt as quickly as possible. Consider consolidating debt into a lower-interest loan or balance transfer credit card and make regular payments to reduce the principal balance.

3. Automate Your Finances

One of the most effective ways to achieve financial success is to automate your finances. Set up automatic transfers from your checking account to your savings, investment, or debt repayment accounts. This will help you stick to your budget and make progress towards your goals without having to think about it. Not sure how? Contact PSB for help!

4. Build an Emergency Fund

An emergency fund is a safety net that can help you avoid going into debt when unexpected expenses arise. Aim to save 3-6 months’ worth of living expenses in a readily accessible savings account. Start by setting aside $20 each week to build an emergency fund, aiming for a year-end cushion of $1,040.

5. Plan for potential major life events

As you set your financial resolutions for 2025, think ahead of any major life events that might affect your finances.

• Engaged? Set planning and budgeting your wedding costs in your 2025 plan
• Travel bug? Start comparing prices for your vacation to begin budgeting
• Have an eye on a new place? Start researching the housing or rental market

6. Start Investing for the Future

Investing can seem intimidating, but it’s an essential step toward achieving long-term financial success. As a beginner, start by exploring low-cost index funds or ETFs, and consider contributing to a retirement account such as a 401(k) or IRA.

A great strategy for beginner investors is interval dollar-cost averaging. For example, if you decide to invest $100 in a mutual fund every month, you might buy 10 shares at $10 per share in the first month, 12.5 shares at $8 per share in the second month, and 8.33 shares at $12 per share in the third month. The formula is:

(Amount to invest) / (Price per share) = (Total shares purchased)

100 / $12 = $8.33

In declining markets, you’ll buy more shares with your fixed deposit. The best way to save money for most people is to make saving automatic.

7. Review and Adjust Your Plan

Financial planning is an ongoing process. Regularly review your budget, savings, and financial goals to ensure you’re on track. Life changes, such as a new job, marriage, or the birth of a child, may require adjustments to your plan. Stay flexible and be prepared to make changes as needed.

Step INTO THE NEW YEAR with PSB

Achieving financial success in 2025 requires discipline, patience, and persistence. By setting clear goals, creating a budget, prioritizing debt repayment, building an emergency fund, starting to invest, automating your finances, and monitoring your progress, you’ll be well on your way to achieving financial freedom. Remember to stay flexible, and don’t be afraid to seek help when you need it.

Take the first step towards achieving your financial goals in 2025. Contact us today to learn more about our financial planning services and how we can help you achieve financial success.