As 2024 comes to an end, there’s no better time to review your finances in preparation for 2025. Looking to improve how you save and spend your money? By analyzing your previous financial practices throughout the year, you can pinpoint which ones are worth bringing into the new year, and the ones better left in the past. Adopt these smart financial habits by the end of the year and give yourself a head start to a successful 2025!

1. Track Your Spending

We’ve heard it all before – keep track of how much you spend in order to truly see how much money we’re losing rather than saving. It’s the oldest trick in the book. But what they don’t tell you is that this trick really does work! It’s easy for small expenses to add up over time (think that morning coffee run or an impromptu shopping spree), but when coupled with larger expenses like monthly bills? That means a lot of money is leaving your account rather than accumulating. When you track your spending and come face to face with just how much of your money is being spent, it’s easier to cut out the expenses we can live without. This way we can guarantee the funds for more expensive costs, like rent, car payments, and other bills. Keep yourself in the loop of your own spending by tracking them month by month.

2. Automate Your Savings

Most people have heard of automatic bill payments that are taken out of their account each month, but did you know you can do the same thing for your savings account? It’s recommended that 10% of each paycheck be deposited into your savings, but truly any amount is better than none! This is a great option for those who struggle with consistently building up their savings – whether it be because we don’t prioritize it, or simply because it slips our mind. Once these automatic transfers are set up, you can focus on other things while being assured that your savings is slowly growing. 

3. Create A Budget

Creating a budget is an extremely important step to saving money, and typically goes hand in hand with tracking your spending. By calculating how much money you spend each month, you budget those funds by deciding which areas of your life you can afford to spend more, and which ones you need to spend less. If you see that you’re spending more on impulse purchases yet come up short for bills, try cutting back on those costs. Best practice calls for us to decide what expenses are non-negotiables and adjust our spending around them. Things like bills, rent, credit card or other loan payments, etc. would be defined as things we can’t live without, and they should always be paid first. Money should also be set aside for everyday, affordable costs, as well as emergency funds for expenses we can’t foresee, such as car troubles or a cracked phone screen. Everyone’s budget is specific to them, and it’s the best financial act of preparation you can take for every year of your life. 

4. Tackle Debt

Make the effort to improve your debt in the upcoming year by making payments when you’re able. You can have your payments automated monthly to ensure consistent payments, or you could even pay them in advance if that fits better into your budget. Diminishing debt can be a time consuming job, which is why any attempts to pay it back is best practice. After all, any payment is better than none! You never want to let debt go unchecked, so start paying it back slowly and your debt will decrease over time. If what you owe seems unmanageable, speaking to a professional like our loan officers is an irreplaceable resource. They can aid in breaking down what you owe and creating a payment plan that works best for you. You can schedule a meeting with a YEFCU loan officer here.

5. Set Clear Goals

Like any goal, it’s important to be as specific as possible with what you’re trying to achieve. Are you looking to grow your savings in the upcoming year? Do you have a loan you’d like to pay off completely? Once you decide what you’d like to accomplish, write down every step you need to take to get there. This allows you to visualize the process and make it less daunting, and more doable. How much can you budget to go towards this goal? Can you increase potential payments to speed up the process? These are all important questions to consider when planning just how you want to tackle your goals in 2025, and the first step in working towards materializing them.

Looking back on the previous year is imperative to improving the one ahead. By doing so we analyze what practices worked, what didn’t, and what we can improve on. Adopting better habits not only improves our daily lives, but our financial futures in the long run. Consider tweaking the way you interact with your money and 2025 could be your most financially successful year yet!