As 2024 draws to a close, it’s the perfect time to take stock of your finances, adjust your approach, and set yourself up for a financially healthy 2025. Whether you're saving for a down payment on a house, planning for a major life event, or simply striving to get ahead financially, solid financial planning is key to achieving your goals. With the right strategies, you can make smart financial decisions that will help you pay your bills on time, grow your savings, and increase your financial confidence.
Here are our expert tips and actionable steps to finish 2024 strong and set yourself up for success in 2025:
1. Review and Reassess Your 2024 Financial Goals
Before setting new goals for 2025, take a moment to reflect on how you’ve done in 2024. Have you stayed on track with your budget? Did you hit your savings targets? Reviewing your goals will give you insights into what worked and what didn’t.
Ask yourself:
- Did I meet my savings goals for the year?
- Did I have any unexpected expenses or financial setbacks?
- Was my emergency fund sufficient to cover unplanned costs?
By identifying what you did well and where you fell short, you can adjust your financial strategies going into 2025.
2. Finish 2024 Strong with Debt Management
If you have outstanding debt (credit cards, loans, or other liabilities), it’s important to focus on paying it down as 2024 winds down. High-interest debt, especially from credit cards, can quickly erode your ability to save and grow wealth.
Here’s how you can tackle it:
- Make extra payments: If you receive a year-end bonus or tax refund, consider using part of it to pay down high-interest debt.
- Consolidate or refinance: If you have multiple high-interest debts, consolidating them into a lower-interest loan or refinancing can save you money in interest payments.
- Prioritize payments: Focus on paying off the highest-interest debt first (the avalanche method) or pay off smaller balances for a psychological boost (the snowball method).
Reducing or eliminating high-interest debt before 2025 will help free up more of your income for savings and future investments.
3. Set Up or Strengthen Your Emergency Fund
Life is unpredictable. Having an emergency fund is crucial to staying financially healthy. Aim to have three to six months’ worth of living expenses saved in an easily accessible account. If you don’t have an emergency fund, now is a great time to start. Set a small goal, such as saving $500 in the next two months, and gradually build from there.
Actionable tip: Open a savings account to grow your emergency fund. This will allow you to earn interest while keeping your money liquid and easily accessible when you need it.
4. Review Your Monthly Expenses and Trim Unnecessary Costs
Take a hard look at your monthly expenses. Are there subscriptions or recurring costs you no longer need or use? Could you reduce your utility bills by making small adjustments at home? Cutting back on non-essential spending will free up more money to save and invest for the future.
Try this:
- Evaluate subscriptions: Are you still paying for streaming services you don’t watch? Or gym memberships you haven’t used in months?
- Automate savings: Set up automatic transfers to a savings or investment account to ensure you consistently save each month.
- Automate bill payments: Automated bill payments are a great way to keep your finances in order and protect against late or missed payments and associated fees and penalties. Cornerstone customers can set up bill payments in the app.
- Refinance or negotiate bills: Consider refinancing your mortgage or car loan for a lower rate, or negotiating bills like your phone or internet service.
By trimming down excess spending, you’ll improve your financial flexibility and make it easier to save for your long-term goals. To make the process easier, we offer online budgeting and savings calculators to help you review your expenses and plan for the future.
5. Make Your 2025 Financial Plan and Set Clear, Actionable Goals
Once you’ve wrapped up 2024, it’s time to focus on 2025. Set realistic, measurable financial goals for the new year. Whether you want to increase your emergency fund, save for a vacation, or invest more, a clear plan will help you stay on track. Break your goals into manageable steps and set monthly or quarterly milestones to monitor your progress.
For example:
Goal: Save $5,000 for a vacation in 2025.
- Step 1: Set aside $420 each month into a dedicated savings account.
- Step 2: Enroll in an auto round-up program like Making Cents.
- Step 3: Review progress every quarter and adjust if necessary.
Goal: Buying a car in 2025
- Step 1: Shop for a car loan, comparing interest rates and estimated monthly payments. Make sure the monthly payment is feasible given your budget.
- Step 2: Save in advance to make a down payment of at least 15 percent. If the car you are buying is listed at $27,800, your down payment should be at least $4,170.
- Step 3: Consider selling your current vehicle yourself, rather than relying on a trade-in. If you are patient, you can often get more equity out of your car by selling it yourself than you would from a dealership.
Goal: Buying a house in 2025
- Step 1: Review your credit score, debt-to-income ratio, and overall savings. A healthy credit score and manageable debt levels can make a significant difference in qualifying for a mortgage and securing favorable interest rates.
- Step 2: Explore housing markets in your preferred area to get a sense of prices, neighborhood trends, and what you can afford based on your income and down payment savings. Remember to factor in closing costs, property taxes, and homeowner’s insurance. Set a budget that’s realistic and aligns with both your current financial situation and future goals.
- Step 3:Work with a lender to get pre-approved for a mortgage. This not only shows sellers you’re a serious buyer, but it also helps you understand what loan amount you can realistically expect.
Your Financial Future Starts Today
Finishing 2024 strong and preparing for a financially healthy 2025 doesn’t have to be overwhelming. By reviewing your current situation, paying down debt, building your emergency fund, and setting clear goals for the future, you’ll be well on your way to financial success. The key is consistency and smart decision-making.
Remember, it’s never too late to start planning for a brighter financial future. Whether you’re just beginning your financial journey or already well on your way, these steps will provide a solid foundation for achieving your goals in 2025 and beyond. Let Cornerstone be a trusted partner in your financial journey—we can provide the tools, resources, and advice you need to make informed decisions.
Let’s finish 2024 strong and step into 2025 with confidence!
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