Kickstart Your Financial Health: 2025 Check-In

The New Year is a time for fresh starts, resolutions, and goal setting—and when it comes to your finances, it's the perfect opportunity to take stock of where you are and make a plan for where you want to go. As a financial planner, I always stress the importance of regularly reviewing your financial situation and January is a great time to do just that! So let’s break down some key areas to focus on as you ring in the New Year with a stronger financial foundation.

1. Review Your Budget

If you haven’t reviewed your budget in a while, now’s the time to take a hard look. Does your current budget reflect your real-life spending patterns? If not, no worries! While this is very common it does mean that it is time to take another pass at setting realistic spending goals. With inflation, rising costs, and changes in your life circumstances (job, family, health), a budget that worked last year might need some tweaking.

Pro Tip:

• Identify areas where you can cut back (subscriptions, dining out, etc.).

• Consider using budgeting tools or apps to track your spending automatically.

2. Assess Your Savings Goals

Have you made progress on your savings goals from last year? Whether it’s for retirement, an emergency fund, or a down payment on a house, it’s time to take a closer look at where you stand. Are you on track, or do you need to adjust your strategy?

If you haven’t already, consider automating your savings. Setting up automatic transfers to a savings or investment account makes it easier to stick to your goals, especially if you’re prone to spending any extra cash that’s left over at the end of the month. It’s important to make saving a priority, not an afterthought.

Pro Tip:

• Ensure your emergency fund is sufficient—generally, aim for 3 to 6 months of essential expenses.

• Break large goals into smaller, manageable milestones.

• Celebrate your wins along the way—small victories can keep you motivated throughout the year.

3. Tackle Debt

Debt management is another crucial component of financial health. Whether you have student loans, credit card debt, a mortgage, or car loans, it's worth reviewing how much debt you’re carrying and how it’s impacting your overall financial picture. If high-interest credit card debt is dragging you down, look into consolidating or refinancing options to lower your interest rates. If you have student loans or other longer-term debt, make sure your payment strategy aligns with your financial goals.

Pro Tip:

• Try the “debt snowball” method (paying off your smallest debts first) or the “debt avalanche” method (paying off your highest-interest debts first).

• Consider a balance transfer credit card if you have high-interest credit card debt.

• If applicable, look into refinancing options to save money on interest.

4. Update Your Insurance and Estate Plans

Life happens—and sometimes it happens quickly. In the hustle of the year, it’s easy to overlook updating your insurance coverage and estate plans, however both are crucial in protecting your financial well-being.

• Insurance: Review your health, life, home, and auto insurance policies. Are your coverage limits still appropriate for your needs? Are there any discounts you can take advantage of?

• Estate Plans: Review or create your estate planning documents. Your life situation may have changed—whether through marriage, having children, or other major life events—so make sure your plans reflect that.

5. Review and Boost Your Retirement Savings

When it comes to long-term financial health, retirement savings should be a cornerstone of your planning. It’s easy to push retirement to the backburner when there are more immediate financial concerns, however the earlier you start saving for retirement, the more powerful compounding can work in your favor. The New Year is the perfect time to reassess your retirement savings and make sure you’re on track.

Pro Tip:

• Evaluate Your Current Savings: Are you contributing regularly? If you’re not maxing out your contributions, consider doing so if you can. Taking full advantage of these limits can make a significant difference over time.

• Take Advantage of Employer Matching: If your employer offers a retirement plan match, make sure you’re contributing enough to receive the full amount!   If you're not contributing at least the amount required for the match, you're leaving money on the table.

• Diversify Your Investments: Look at the mix of investments within your retirement accounts. If you are unsure of how to allocate your investments, Southbound Wealth can help!

• Catch-Up Contributions: If you're age 50 or older, don’t forget about the catch-up contributions available to you. These extra contributions allow you to put more away as you approach retirement. 

• Roth or Traditional? When deciding between a Roth IRA/401K and a Traditional IRA/401K, it's important to consider your current tax situation and long-term financial goals. Roth contributions are made with after-tax dollars, offering tax-free withdrawals in retirement, while Traditional contributions are tax-deferred, potentially lowering your taxable income now but subject to taxes when withdrawn in the future. This decision can have a significant impact to retirement savings & Southbound Wealth is here to help you choose!

6. Get Professional Help (If Needed)

Managing finances can feel overwhelming and be time consuming.  If you are not sure if you are on track to achieve your goals, don’t hesitate to reach out to schedule a complementary introductory meeting.  Southbound Wealth has the tools and expertise to help you take the next step towards retirement, saving for a house, or anything else in your financial life!  

The start of a new year is the perfect time to get your finances in order. By taking a proactive approach and checking in on your financial health, you’ll set yourself up for many years of success and financial stability.

Here’s to a financially savvy 2025!