The New Year is a time for new beginnings. It also provides an opportunity to examine your commitment to your goals. Whether you would like to ditch some bad habits or improve your financial health, the beginning of 2025 is a great time to consider financial New Year’s resolutions. Here are four resolutions that we think are worthwhile.

Budget and Plan

Putting together a financial plan should be your top priority. Having a clear picture of your income, expenses, debts and investments is an important part of financial analysis and establishing financial health. Listing and itemizing your total debt situation is helpful for you to see and stay aware of your full picture and to act if needed. Determine how much you can realistically afford to pay towards debt during the year. When you know your monthly inflow and outflows, establishing a budget will help to keep you accountable and prioritize what is most important to you. A financial advisor can help you create a budget as part of your broader plan.

Goal setting is an important second step when creating your financial plan. Jot down one or two goals while looking at your monthly finances. These can be small goals like setting aside a small amount of money each month for your dream vacation, a down payment on a home or your children’s education fund. Consider examining specific items like your eating-out budget and your annual subscription fees. These may feel like small actions, but they can add up quickly in a year’s time. 

If you struggle with saving and you need a solution to make money less tempting to spend so you can accomplish your goals, then have a portion of your paycheck automatically be deposited into a separate savings account. There’s a reason the saying is “out of sight, out of mind.”

Review Your Retirement Savings

Recently, the IRS announced changes to the 401K limit that will make it possible to save more money for retirement. Beginning this year (2025), the contribution limit for an employee that participates in 401(k), 403(b) and most 457 plans increased by $500. The limit in 2025 is now $23,500 up from 2024’s limit of $23,000. If you were contributing the maximum amount in 2024 and want to continue doing this in 2025, you will want to review and adjust your contributions to take full advantage of the higher limit.

Have you changed jobs recently? If you have retirement funds from previous jobs floating around, consider consolidating them. You can transfer these funds into your current employer’s 401(k) or roll them over into an individual retirement account (IRA).

Analyze Your Insurance

If you landed a promotion or if your home appreciated in value in 2024, you may have more to protect today than you did at the beginning of last year. Life insurance ensures that you can protect your family if your life circumstances change. Insurance can have multiple functions depending on your age and your current status in life. Most insurance agents don’t have information on your full financial picture and they’re trying to sell you specific products. However, working with your independent financial advisor to secure life and long-term care insurance can ensure you’re covered – but not over-insured – for your life ahead.

Look at your home, auto and life insurance policies to ensure they still meet your needs. Make sure you have enough coverage and check to see if you need to adjust your deductibles. It’s important to reevaluate your insurance policies to make sure you’re properly insured and you aren’t paying too much for them.

Establish a 529 Plan

The cost of higher education continues to rise and can exceed $150,000 per child in some cases. If your kids are debt-free when they graduate, they may end up starting their working lives in a better financial position than many of their peers.

A 529 plan is a tax-advantaged savings plan designed to encourage saving for future education costs. 529 plans are college savings accounts that are exempt from federal taxes and are legally known as “qualified tuition plans”. They are sponsored by states, state agencies or educational institutions and are authorized by Section 529 of the Internal Revenue Code. These accounts can be used for qualified education expenses which could include not just college but tuition for a private school as well.

Do Not Stress the Number on the Scale

Be cautious about setting unrealistic goals. Set attainable goals and consistently remind yourself why you made the resolution in the first place. Consider keeping a checklist of your goals so you can track your progress during the year and always review your goals and objectives with your financial advisor.

Don’t hesitate to reach out to us to discuss your next steps for getting financially fit this year.

*The cost and availability of life insurance depend on factors such as age, health, and the type and amount of insurance purchased. Before implementing a strategy involving life insurance, it would be prudent to make sure that you are insurable by having the policy approved. As with most financial decisions, there are expenses associated with the purchase of life insurance. Policies commonly have mortality and expense charges. In addition, if a policy is surrendered prematurely, there may be surrender charges and income tax implications. Life insurance contracts require the owner to make premium payments as described in the contract. Failure to make payments will eventually result in a “lapse” of the contract leaving the client without life insurance coverage. Depending on the health of the insured, obtaining coverage after a lapse may be more expensive, or impossible.

*Investors should consider the investment objectives, risks, charges and expenses associated with municipal fund securities before investing. This information is found in the issuer's official statement and should be read carefully before investing.

Investors should also consider whether the investor’s or beneficiary’s home state offers any state tax or other benefits available only from that state’s 529 Plan. Any state-based benefit should be one of many appropriately weighted factors in making an investment decision. The investor should consult their financial or tax advisor before investment in any state's 529 Plan.