New Year, New Start: Tips for Your Financial Wellness

Key Takeaways

The start of a new year is often a great time to set new goals for yourself. And if you're like many people, financial wellness ranks high. In fact, New Year's resolutions about money were the second most popular goal for 2024.*

So, where can you start? Financial consultants Ryan Adams, Jimmy Merdian, Sarah Pedersen and Addison Tantillo offer their top three tips to help improve your financial wellness next year (or anytime) and help you start and keep your resolutions.

Financial Wellness Tip 1: Create or Revisit Your Budget

Love or hate them, budgets can be a key to better financial wellness. A budget helps you take control of your finances (rather than having your finances control you). Tracking expenses can help you find more money to save for emergencies, your future and things you've always wanted to do.

"People who dislike budgets often haven't given it a try," Ryan says. He suggests starting with a simple budget. That could mean starting with an annual budget rather than keeping track of one every month.

Addison agrees. "Going through the budgeting process can help you understand where your money goes. And often, people are surprised by what they're spending."

He also says budgeting does not have to look the same for everyone. You can make your budget your own and track it how you want. Not everyone needs a detailed budget spreadsheet.

Does Everyone Need a Budget?

We think so, but you may not need as precise of a budget if you have a well-funded emergency fund and consistently pay down your debt (rather than increase it). It's a good idea to keep an eye on those two things, and if one gets out of whack, that may be when it's time to get more serious about a budget.

Nowadays, managing your budget with apps and your phone is simpler. Our consultants suggest taking advantage of the technology to monitor your spending.

Reviewing your budget once a year and accounting for occasional expenses that don't occur monthly are ways to help you stay on track. "Be prepared for unexpected expenses, as they can disrupt your budget," advises Addison.

"Revisiting your budget at the end of the year can help you evaluate if it's working for you," says Sarah. Opportunities such as a bonus or a raise may also spring up through the year. These opportunities allow you to reassess and establish a new investment objective. On the flip side, if your debt has increased, it may be a good time to rethink your spending habits and plan to pay off that debt.

Financial Wellness Tip 2: Get a Financial Checkup

Before a new year starts, our consultants say it's a good time to check your finances, like an annual medical checkup. People often experience changes at the end of the year, including retirement or learning about health care and insurance cost changes. And, of course, the increased cost of living is something to keep an eye on.

Where do you start? Reviewing all your year-end financial statements and checking your net worth can be two good ways to help you assess your financial health. You also want to review your assets and liabilities and see how you are tracking toward your goals.

"Compare your savings, investments and debt at the beginning and end of the year to assess your financial situation," advises Jimmy. This can inspire you to make necessary changes and motivate you to improve your financial situation now and in the future.

Financial Checkups Are Easier When You Have an Existing Plan

Getting a financial plan is a good idea for the new year if you don't have one. While having a checkup at least every year is important, having a plan may be the best place to start.

"Many people believe they're too busy for a financial plan or think they have more urgent matters to deal with," Ryan explains. "We're here to assist with that. We will need people to gather their information, and that's probably the most time-consuming part. However, other than that, we create the plan to fit your goals."

"It's our job to do the legwork," says Addison. "Once our part is done, we can review the plan with the client typically in less than an hour." Of course, we want as many details as possible, but our consultants say they can help you create a plan even if you don't have precise figures to start with.

At what age should you start getting a financial plan? A plan is good for any age—it's not just for those nearing retirement. And they may not cost as much as you think. Check out our prices for financial planning with personal financial consultations.

Financial Wellness Tip 3: Invest More in Your Future

Our third tip to help improve your financial standing is to increase investing where possible. And it might not be as difficult or painful to your budget as you might think.

"Start by revisiting your retirement plan contribution limits and your income," Addison says. "If you received a raise, it might be a great time to put any extra toward your future."

If you have a retirement plan at work, consider bumping up your contribution from your paycheck by 1% or 2% at the end of each year. "If your contributions are pretax, you may not notice much of a difference on your paycheck because it lowers your taxable income," says Sarah.

No 401(k)? Jimmy says, "You can still boost your retirement savings by increasing your contributions by a percentage or small dollar amounts each year into an IRA while keeping the annual limits in mind."

Remind yourself by marking it on your calendar. This is especially easy to do if you have automatic investments already set up for your IRAs. "Do that every year," says Sarah. "And before long, you could max out your contributions without making a huge dent in your budget."

Improve Your Financial Wellness By Choosing One Tip

Although we're offering our three top tips for financial wellness, our consultants say there are more you could focus on for your New Year's money resolution, such as planning to pay off debt or consolidating old retirement accounts into one. However, choosing one to focus on for the year may give you a better chance of keeping your resolution.

"Whatever money resolution you make for the new year, make sure you choose one that's doable for you. Any healthy choice you make with your money can make a big impact on your financial wellness for years to come," says Jimmy. "And if you need help with your financial resolutions, we're here to help."

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