Now that the holidays are behind us, many people are dealing with the financial aftermath from all that gift-buying and celebrating. Now it’s time to recalibrate, getting back to healthier habits and prioritizing financial health.
With New Year’s resolutions in full swing, it’s the perfect time to review and revise your financial goals and plans, working towards a prosperous 2025. It’s wise to:
Review and revise your financial plan.
Think about your short- and long-term financial goals, and create a road map outlining the steps you’ll take to achieve them.
Work with a financial expert that provides a comprehensive, integrated approach, who can help you develop (or revise) a personalized financial plan based on your current circumstances and goals.
Assess your investments. While you often have to play the long game when it comes to investments, it’s wise to review your portfolio annually to determine whether your investments still align with your financial goals. Is your portfolio appropriately diversified? Has your risk tolerance changed, for instance, becoming more conservative as you approach retirement? Have you taken steps to reduce your taxable income, such as contributing to a 401(k) or pension plan?
Review your budget. Consider your budget to determine how you spent (and saved) your money last year. Assess your income, expenses, debts and savings. Is your income allowing you to live your preferred lifestyle? Where could you trim spending? Do you have an emergency savings fund of 4-6 months’ worth of expenses? If not, make this a top priority for 2025.
Consider any major life events from last year. Weddings, births, deaths, job loss, retirement and other big life events can impact your spending, budget and financial plan. If you had a major life change in 2024, discuss it with your financial advisor, who can help you revise your financial plan (and goals) accordingly.
Offset capital losses. If you had portfolio losses last year, you may be able to offset current (or future) gains with these losses. Talk to your financial advisor and tax preparer about tax loss harvesting, or reducing the amount you’ll owe in taxes now and in the future.
Assess your insurance coverage. It’s essential to have proper, comprehensive insurance to protect your family and your assets. As part of your financial review, assess your existing policies and coverage. Is your current coverage still sufficient? Are your insurance beneficiaries up to date, especially if you went through a life event — like the birth of a child — last year?
Make (or update) an estate plan. Your estate plan should include a will and living will, as well as a health care and financial power of attorney. Be certain that your estate plan is updated and accurate, listing the correct beneficiaries. If you don’t have an estate plan, work with your financial advisor to create one ASAP.
Meet with your financial advisor. Don’t get overwhelmed by this checklist. Contact your financial advisor, who can support and guide you.
Celebrate your successes. Did you stick to your budget last year? Compile an emergency savings fund? Pay off a debt? Celebrate your financial victories from 2024, which will contribute to your financial health and successes in 2025 and beyond!
While people’s New Year’s resolutions often focus on physical health — such as eating better and returning to the gym — prioritizing your financial health is also essential. Taking these concrete steps can help protect and preserve your financial well-being, allowing you to maintain your preferred lifestyle and your peace of mind.
Joseph H. Guyton is principal of The Guyton Group based in Portsmouth. He was recently named the best financial security professional in New Hampshire by Forbes, and has received accolades including the Five Star Wealth Manager and President’s Council Qualifier awards.
