With the new year underway, there’s no better time to assess your financial health and set new goals. According to a recent Discover Personal Loans poll, over half of U.S. consumers planned to make a financial resolution for 2025. Even if you haven’t set goals yet, financial experts emphasize that starting now is ideal.
“The beginning of the year is the perfect time for a financial reset,” said Jordan Awoye, managing partner of Awoye Capital. “You’re able to start from scratch, see what you’ve done the year prior, and just have a clean slate.”
Why Now is the Right Time for a Financial Reset
Tax Season is the Perfect Opportunity
The 2025 tax filing season begins on January 27, presenting an opportunity to evaluate last year’s financial decisions and set priorities for the year ahead, Awoye explained.
Common Financial Resolutions
Top resolutions include saving more, improving credit scores, building an emergency fund, and paying down debt. However, challenges like inflation, unexpected expenses, and the state of the economy may make achieving these goals difficult, according to Discover’s poll.
Steps to Kickstart Your Financial Goals
Build a Budget
Start by tracking your income and expenses. “Ask yourself, ‘Do you have more money coming in than going out? If not, what expenses can you cut, and what additional revenue streams can you create?’” Awoye advised. Aim to save three to six months’ worth of expenses in an emergency fund.
Pay Down High-Interest Debt
“Paying off high-interest debt, like credit card debt, should be a top priority,” said certified financial planner Corbin Blackwell. With interest rates on credit cards often exceeding 20%, it’s crucial to reduce this financial burden while still building savings.
Focus on Long-Term Investments
For goals that extend 10 years or more, such as retirement, investing is key. Natalie Taylor, CFP and founder of The Goodland Group, suggests using retirement accounts like IRAs or 401(k)s and considering taxable brokerage accounts for additional savings.
Save or Invest? It Depends on Your Goals
Taylor explains that financial goals fall into two categories:
- “Base Hit” Goals: These include building an emergency fund or saving for a short-term need. Cash-based strategies, like high-yield savings accounts or certificates of deposit, are appropriate for these goals.
- “Home Run” Goals: Goals such as early retirement or funding a child’s college education may require more aggressive investing in a diversified portfolio.
Focus on What You Can Control
Don’t let economic uncertainty or past financial mistakes hold you back. “There’s no amount too small to get started,” Blackwell emphasized. Whether it’s saving a few dollars or paying down a small portion of debt, incremental steps add up over time.
Define Your Financial Success
Ultimately, financial success depends on your personal goals. “Where you’re going to find financial success is going to depend on what you define as successful,” Blackwell said. By taking deliberate steps now, you can set the stage for a financially healthier year ahead.
