A new year is time for celebration, reflection and goal setting. Did you accomplish what you wanted last year? Are you ready to take on new challenges? What about your finances? Are they where you want them to be? If you're not quite where you hoped to be, it might be time to make some financial goals as part of your New Year's Resolution. We’ve compiled resources to inspire your financial aspirations for 2025 based on the current economic climate.
1. Make a plan for the future
Do you have a financial plan? From saving to retirement, a written financial plan is crucial for developing the peace of mind to feel in control of your finances.
"A financial plan is about taking a good look at where you are now, where you want to be and how you can get there while managing risk," said Kimberly Bridges, director of financial planning at BOK Financial®.
While thinking about the future, remember to look into how to cover long-term care, which you'll likely need in your older years—and remember it's cheaper to buy it now than later. Also, shore up your estate plan so that when you do pass, your assets are distributed according to your wishes.
2. Get your spending under control
Inflation and the high cost of living over the past year have left many with no choice but to use credit cards, which can lead to debt. If your spending is out of control, now is the time to do something about it. Learn debt-reducing habits and consider how to start lowering your debt immediately. If you still need to make big-ticket purchases, look into buy-now-pay-later options to spread payments out and keep them manageable, but be sure to understand the risks of this payment approach. These moves could help you navigate inflation.
3. Improve your savings habits
If you're living on a tight budget, it's easy to forgo saving for an emergency fund and retirement, but it's not a great strategy when a job loss or car repair comes out of nowhere and forces you into debt on your credit cards. Learn how having an emergency savings can be a life raft and how to make the most of unexpected money, such as a tax refund or a big windfall like an inheritance.
4. Make adjustments for changing interest rates
Interest rates ran high for most of this year, making any debt you carry more challenging but creating opportunities for saving more. Then, the Fed started cutting rates. So now what? It may be a good time to look into Certificates of Deposit (CDs) as a safe place to park and grow your money before rates are cut again. For retirees jittery about the market's volatility now that you don't have time to recover from any significant dips, you may be able to use falling interest rates in your favor to tackle credit card debt or downsize into a new home.
5. Stay on top of scams
You work hard for your money; the last thing you want to do is lose it to a scammer. Be proactive to stay on top of the latest scams such as phone SIM card swapping and AI-generated phishing attacks.
6. Have those money talks
Talking about money with loved ones can be awkward but it's necessary to know where you stand on your finances and keeping it safe.
"Ideally, the people we care about should be able to make informed decisions that are right for them, and they can't do that if we don't talk," said Victoria Ungashick, private wealth executive at BOK Financial.
From talking to your kids about cybercrime to avoid while they're away from college to talking to your partner or parents about plans for the future, plan to have those "sit-downs" in the new year.
7. Make the most of homeownership programs and equity
If next year is the year you're finally going to attempt to enter homeownership, look into the options available to lower your downpayment and programs to make ownership more affordable.
If you've been a homeowner for a while, learn how paying more into your mortgage could help you save on interest in the long run, and how you might be sitting on an equity goldmine you can tap for some emergency cash.
8. Be ready for the unexpected
A sudden divorce, widowhood or the unexpected disability of a spouse can often throw people into financial hardship. Women are especially vulnerable, considering they often are paid less than men and often take time out of their prime earning years for caregiving. Even if life throws you a curveball, it's possible to get back on your feet and embrace new opportunities. The key is to work with a financial specialist to make a plan that includes reviewing your income, expenses, net worth and goal setting to accommodate your new reality.
By setting goals and working down your checklist, you can make 2025 the year you finally gain control of your finances. And that's something to celebrate indeed!
. © 2024 BOKF, NA.