NEW YORK (AP) – As we approach the end of 2024, you might be reflecting on financial goals for 2025.
Whether you’re saving to move out of your parents’ house or pay off loan, financial resolutions can help you stay motivated, said consumer advocate for Credit Karma Courtney Alev.
“Entering a new year doesn’t erase all our financial challenges from the prior year,” Alev said. “But it can really help to bring a fresh-start mentality to how you’re managing your finances.”
If you’re planning to make financial resolutions for the new year, experts recommend that you start by evaluating the state of your finances in 2024. Then, set specific goals and make sure they’re attainable for your lifestyle. Here are some tips from experts:
CHANGE YOUR RELATIONSHIP WITH MONEY
Think about how you currently deal with finances – what’s good, what’s bad, and what can improve.
“Let this be the year you change your relationship with money,” said personal finance educator for YNAB Ashley Lapato, a budgeting app.
If you feel like money is a chore, that there’s shame surrounding the topic of money, or like you were born being “bad at money”, it’s time to change that mentality, Lapato said.
To adjust your approach, Lapato recommends viewing money goals as an opportunity to imagine your desired lifestyle in the future. She recommends asking questions like, “What do my 30s look like? What do my 40s look like?” and using money as a means to get there.
Head of SoFi Investment Strategy Liz Young Thomas added that it’s key you forgive yourself for past mistakes in order to move into the new year with motivation.
KNOW YOUR ‘WHY’
When setting your financial resolutions for 2025, it’s important to establish the “why” of each, said CEO of Origin Matt Watson, a financial tracking app.
“If you can attach the financial goal to a bigger life goal, it’s much more motivating and more likely you’ll continue on that path,” Watson said.
Whether you’re saving to buy a house, pay off credit card debt or take a vacation, being clear about the goal can keep you motivated. Watson also recommends using a tool to help you keep track of your finances, such as an app, spreadsheet, or website.
BUDGET, BUDGET, BUDGET
“After three years of inflation, your pay increases are likely still playing catch up to your monthly expenses, leaving you wondering where all the money is going,” said Chief Financial Analyst at Bankrate Greg McBride.
“Make that monthly budget for 2025 and resolve to track your spending against it throughout the year.”
McBride said that you may need to make adjustments during the year as certain expenses increase, which would require cutting back in other areas.
“Calibrate your spending with your income, and any month you spend less than budgeted, transfer the difference into your savings account, ideally a high-yield savings account,” he said.
SET REALISTIC, PRACTICAL GOALS
When planning for your financial resolutions, it’s important to consider how you’re going to make your goals sustainable for your lifestyle, said Credit Karma’s Alev.
“It really is a marathon, not a sprint,” Alev said.
Alev recommends setting realistic, practical goals to make it easier to stick with them. For example, instead of planning to save thousands of dollars by the end of the year, start by saving USD20 a paycheck.
Even when your plans are achievable, there are times you’ll get derailed.
Maybe it’s an unexpected medical bill or an extraordinary life event.
When these situations happen, Alev recommends trying not to feel defeated and working to get back on track without feeling guilty.
DON’T BURY YOUR HEAD IN THE SAND
“You can’t manage what you can’t see, so set a New Year’s resolution to check your bank monthly in 2025,” said Chief Economist at VantageScore Rikard Bandebo.
SLOW DOWN
Your financial goals can encompass more than just managing your money better – they can also be about keeping your money safe from scams.
A golden rule to protect yourself from scams is to “slow down”, said Executive Vice President of security solutions at Mastercard Johan Gerber.
“You have to slow down and talk to other people if you’re not sure (whether or not) it’s scam,” said Gerber, who recommends building an accountability system with family to keep yourself and your loved ones secure.
Scammers use urgency to make people fall for their tricks, so taking your time to make any financial decision can keep you from losing money.
FOCUS ON FINANCIAL WELLNESS
Your financial goals don’t always have to be rooted in a dollar amount – they can also be about well-being. Finances are deeply connected with our mental health, and, to take care of our money, we also need to take care of ourselves.
“I think that now more than any other year, your financial wellness should be a resolution,” said personal finance expert and founder of The Money Mindset Hub Alejandra Rojas, a mentoring platform for women entrepreneurs. “Your mental health with money should be a resolution.”
To focus on your financial wellness, you can set one or two goals focusing on your relationship with money.
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. – Cora Lewis & Adriana Morga
