Smart Budgeting, Bright Future: Planning Your Finances for 2025

With 2025 officially here, it's a great time to focus on your financial goals for the year. While many people set resolutions to save more, travel, or improve their health, your financial planning should be a top priority.

Sticking to financial goals, especially your budget, can be challenging. What starts with good intentions often becomes hard to maintain. But with a solid plan and commitment, you can turn your financial resolutions into something both meaningful and achievable.

To make things a little easier, here are some short, practical tips to help you meet your financial goals this year.

Boost Your Savings

Saving more is a popular goal, but how can you make it happen? A great way to start is by automating your savings. Set up monthly transfers from your checking account to your savings account. By "paying yourself first," you ensure that saving becomes a priority before you spend on anything else. This budgeting habit can help you stay on track.

Pay Down Debt

As of 2024, consumer debt in the United States has reached a staggering $17.06 trillion. Tackling your debt should be a major priority in your 2025 financial plan. Begin by reviewing what you owe—credit cards, mortgages, car loans, student loans, and more. Understanding the types and amounts of debt you have is essential for creating a solid debt repayment strategy.

Create a repayment plan that targets high-interest debts first, especially credit card balances. These are the costliest and can get out of hand fast. If you are in the market for a good credit card, click here to take advantage of some cash back and low-rate options, plus a limited-time balance transfer offer.

Everyone's financial situation is different, so there's no one-size-fits-all approach to debt repayment. If you're feeling overwhelmed, don't hesitate to seek professional financial advice.

Get a Head Start on Taxes

Start getting your tax documents organized early in 2025. Review your W-4 withholding and adjust if needed. As you receive W-2 or 1099 forms, file them right away instead of waiting until tax season. Don't forget to track any government payments or credits you've received. If you're unsure, it's a good idea to consult a tax professional for personalized advice.

Create and Stick to a Budget

Developing and following a budget is crucial for achieving your financial goals. Here's a simple four-step process:

1. Calculate your after-tax income, including all sources such as your main job, side gigs, and any other regular income.
2. While spreadsheets are great, choosing a budgeting app can make tracking easier. Track everything—from essential bills to discretionary spending. A good spending analysis tool, such as the financial management tools in our Digital Banking, can help you categorize your expenses automatically.
3. Set up automatic transfers to your savings and retirement accounts. Aim to save at least 20% of your income, if possible.
4. Review and adjust your budget regularly. Life changes, and so should your budget. Remember to add a section for unexpected expenses; it's a great way to keep your budget flexible.

Build an Emergency Fund

An emergency fund is an important budget item that's often overlooked. If your car breaks down tomorrow, will you be able to cover the repair costs or even replace it? Or if your spouse suddenly fell ill and couldn't work for months, would you still be able to pay your bills?

If you haven't focused on building an emergency fund, you're not alone. A 2023 Bankrate survey found that only 43% of Americans could cover a $1,000 emergency expense from savings. Many would have to rely on credit cards or loans, which can make their financial situation worse.

Start small but stay consistent with your emergency fund contributions. For example, saving $100 from each paycheck could add up to $2,600 over the year—a great start to your emergency fund.

Invest in Long-Term Wealth

While there's no guaranteed path to wealth, consistent, long-term investing is a proven strategy for building financial security over time.

All investments come with some level of risk. Stock markets fluctuate, interest rates impact bond values, and economic conditions affect various asset classes differently. Understanding and managing these risks are key to successful investing.

Diversification remains a cornerstone of risk management in investing. By spreading your investments across different asset classes—stocks, bonds, real estate, and others—you can potentially reduce your overall risk. However, remember that diversification doesn't guarantee profits or protect entirely against losses.

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Boost Your Retirement Savings

Make 2025 the year you kick your retirement savings into high gear. If you haven't already, open a retirement account immediately. For 2025, the contribution limit for 401(k) plans is $23,500, with an additional $7,500 catch-up contribution for those 50 and older. Take full advantage of any employer match—it's essentially free money for your future.

Consult a Financial Professional

If you're not sure what to do with your money in 2025 and beyond, a financial professional can help you review your financial situation and determine a strategy for the upcoming year.

Look for an independent, non-commissioned wealth advisor to help you consider the investment strategies, insurance options, cash management vehicles and other tools specific to your circumstances and goals. Make sure they have your best interests in mind, and that their advice aligns with your financial objectives.