Every January, millions of Americans commit to improving their lives with New Year’s resolutions. And this year, financial wellness is leading the charge thanks to inflation, rising housing costs, and higher prices for everyday necessities. Whether it’s saving more, paying off debt, or simply gaining control over your budget, the beginning of the year is the ideal time for a financial reset. Think of it as your annual financial checkup—a deep dive into your money habits and goals to set the stage for a brighter, more secure future.
Why a Financial Checkup is Non-Negotiable
Much like a physical health checkup, a financial checkup allows you to identify areas of strength, pinpoint potential risks, and set actionable improvement plans. The payoff? Greater confidence, less stress, and a clearer path to achieving your financial dreams.
Here’s what a financial checkup can do for you:
- Provide Clarity: A thorough review of your finances helps you understand your spending patterns and overall financial health.
- Set the Stage for Growth: Establishing or revisiting goals ensures you work toward meaningful outcomes.
- Increase Resilience: Spotting potential issues early means fewer surprises and a greater ability to weather financial challenges.
Reviewing your financial “vital signs” will identify areas for improvement, ensure your goals are on track, and empower you to take control of your money. The good news is that you don’t have to do it alone – our Chartway team members are here to guide you through these steps with personalized advice.
Step 1: Review the Past Year’s Financial Performance
Before looking ahead, it’s important to reflect on the previous year. Understanding what went well and what could have gone better is key to setting realistic and effective goals for this year.
Ask yourself:
- Did I meet my savings or debt-reduction targets?
- Were there unexpected expenses, and how did I handle them?
- Are there habits I’d like to change or build on?
Celebrate wins, no matter how small, and use challenges as learning opportunities. For example, if you successfully built an emergency fund but struggled to control discretionary spending, you can focus on tightening that area in 2025.
Step 2: Get a Clear Picture of Your Spending Habits
Even if you feel like you’re in a great place financially, it’s still smart to review your actual spending to ensure nothing slips through the cracks. You might even find a few surprises.
How to Get Started:
- Track Your Spending: First, pull up your last two months of bank, credit card, and payment app statements.
- Categorize Expenses: Next, divide spending into essentials (e.g., housing, groceries), discretionary (e.g., dining out, entertainment), and occasional costs (e.g., gifts, travel).
- Spot Patterns: Then, identify areas where you’re overspending or opportunities to save.
By gaining clarity on your spending habits, you can make informed decisions about where your money should go in 2025. For example, if inflationary pressures caused you to spend more than you anticipated for the holidays in 2024, you could increase the amount you allot to that category in your budget for this year. Budgets are not static; they’re living documents that need regular updates. If your spending or income has shifted, it’s time to recalibrate.
Step 3: Automate Your Savings and Payments
Automation is one of the easiest ways to take control of your finances. By automating savings and payments, you’ll reduce the risk of missed deadlines and keep your goals on track.
Here’s how to do it:
- Automate bill payments: Set up auto-pay for recurring bills like rent, utilities, and debt payments to avoid late fees and protect your credit score.
- Schedule Savings Contributions: Make regular transfers from your checking account or use direct deposit through your employer to deposit to a high-yield savings account, retirement fund, or emergency fund.
- Use Windfalls Wisely: Direct year-end bonuses or tax refunds into savings, debt repayment, and small personal treats.
Automating your finances takes much of the effort out of money management. It also creates a system for ensuring that your savings and bills are prioritized no matter how busy you get.
Ready to Get Started?
Checking in on your money management is an important part of keeping your finances healthy and your dreams within reach. Plus, committing to a financial checkup and establishing a strong savings strategy can help you feel confident about your finances and future. And you don't need to do it alone – a Chartway team member can help you develop a plan of action to reach your goals. We’ll break the process into manageable steps to take control of your money with a personalized plan that works for you. Plus, when you complete a financial checkup with Chartway between January 6 and February 28, 2025, you’ll be entered into a $100 drawing. It’s a simple way to kick-start your year while setting yourself up for success.
Schedule an appointment with one of our certified financial coaches today!