FILE – New Year’s Eve 2025 numbers are displayed in New York’s Times Square on December 18, 2024. AP Photo/Julia Demaree Nickinson, File
cola lewis
Adriana Morga
Associated Press
NEW YORK (AP) — As 2024 draws to a close, you may be thinking about your financial goals for 2025.
Whether it’s saving up to move out of your parents’ house or save up to pay off student loan debt, finding financial solutions can help you stay motivated, says Credit Karma Consumer Advocate Courtney Alleb. .
“Starting a new year does not erase all the economic challenges of the previous year,” Alev said. “But it can be very helpful in bringing a fresh start spirit to managing your finances.”
If you’re planning on making financial resolutions for the new year, experts recommend starting by assessing where your finances will be in 2024. Next, set specific goals and make sure they are achievable with your lifestyle.
Here are some tips from the experts.
change your relationship with money
Think about how you currently deal with money, what’s good, what’s bad, and what could be improved.
“Make this the year you change your relationship with money,” says Ashley Lapat, personal finance educator at household budgeting app YNAB.
If you feel like money is a hassle, you’re embarrassed to talk about it, or you feel like you’re just not good with money, it’s time to change your mindset, Lapat says.
To adjust your approach, Lapat recommends looking at your money goals as an opportunity to imagine the lifestyle you want in the future. She recommends asking questions such as: “What will my 30s look like?” What will my 40s look like? ” and use money as a means to get there.
Liz Young-Thomas, head of investment strategy at SoFi, added that to enter the new year with motivation, it’s important to forgive yourself for past mistakes.
Know your “why”
When setting financial goals for 2025, it’s important to establish the “why” for each one, says Matt Watson, CEO of financial tracking app Origin.
“If you can connect your financial goals to your larger life goals, you’ll be more motivated and more likely to stay on that path,” Watson says.
Whether you’re saving up to buy a house, pay off credit card debt, or take a summer vacation, having clarity on your goals can help you stay motivated. Watson also recommends using tools to help you track your finances, such as apps, spreadsheets, and websites.
budget, budget, budget
“After three years of inflation, salary increases are likely keeping up with monthly expenses, leaving you wondering where your money went,” said Greg McBride, chief financial analyst at Bankrate. It will happen,” he said. “I resolve to create a monthly budget for 2025 and track my spending on it throughout the year.”
McBride said adjustments may be needed during the year as certain expenses increase, which would require cuts in other areas.
“Adjust your spending according to your income, and in any month that your spending is below budget, move the difference into a savings account, ideally a high-yield savings account,” he said.
repay unpaid debts
“Interest rates are unlikely to fall quickly, so we need to make a huge effort to pay down debt, especially high-value credit card debt, and we need to pay it off quickly,” McBride said.
Start by figuring out how much debt you currently have compared to the beginning of the year. Hopefully your repayments are on track, but if you’re heading in the opposite direction, McBride recommends developing a strategy. This includes considering 0% balance transfer offers.
Control credit card interest rates
“You have more influence over credit card interest rates than you realize,” said Matt Schultz, chief credit analyst at LendingTree. “Exercising that power is one of the best actions we can take in 2025.”
He said credit cards with 0% balance transfer rates are a “good weapon” in the fight against high card APRs, or APRs. Low-interest personal loans are also an option.
You might just pick up the phone and ask for a lower interest rate. According to LendingTree research, the majority of those who did so in 2024 were successful, losing more than 6 points on average.
Set realistic and practical goals
Credit Karma’s Alev said when planning financial solutions, it’s important to think about how to make your goals sustainable for your lifestyle.
“This is truly a marathon, not a sprint,” Alev said.
Alev recommends setting realistic and actionable goals to help you stick to it. For example, instead of planning to save thousands of dollars by the end of the year, start by saving $20 per paycheck.
Even if you achieve your plans, they may go awry. Maybe it’s an unexpected medical expense or a special event in your life. When this situation happens, Alev recommends trying not to feel defeated and trying to get back on track without feeling guilty.
don’t bury your head in the sand
“You can’t manage what you can’t see, so make a New Year’s resolution to check your credit score every month in 2025,” said Ricardo Vandebo, chief economist at VantageScore. “Make sure you pay at least the minimum amount on your credit accounts. It’s one of the best ways to improve your credit score.”
Vandevo also advises student loan borrowers to make all payments on time, as servicers will begin reporting late payments in January and missed payments will affect a borrower’s credit score.
Automate savings where possible
McBride said automated tasks such as increasing workplace 401(k) plan contributions, setting up direct deposits from paychecks into dedicated savings accounts, and arranging monthly transfers to IRAs and 529 college savings accounts All changes will take effect immediately, he said.
slow down
Financial goals include not only managing your money better, but also protecting it from fraud. Johan Gerber, Mastercard’s executive vice president of security solutions, said the golden rule to protect yourself from fraud is to “slow down.”
“If you’re not sure if it’s a scam, you need to stay calm and talk to someone else,” Gerber said, recommending creating an accountability structure with your family to keep yourself and your loved ones safe. .
Scammers use impatience to trick people into their schemes, so taking your time and making financial decisions can help prevent losses.
Focus on financial health
Financial goals don’t necessarily have to be rooted in money. It can also be about happiness. Money is deeply connected to our mental health, and in order to take care of money, we also need to take care of ourselves.
“Right now, more than any other year, I think your financial health should be the answer,” says the director of Money, a personal finance expert and mentoring platform for women entrepreneurs. said Alejandra Rojas, founder of Mindset Hub. “Money mental health should be the answer.”
To focus on your financial health, you can set one or two goals that focus on your relationship with money. For example, Rojas says you can find ways to cope with and resolve financial trauma, or set a goal to talk more openly about money with your loved ones.
