The start of a new year offers the perfect opportunity to reflect on your financial goals and set a clear path for the year ahead. Whatever your goals, whether saving for a home, focusing on long-term retirement savings, or opening a 529 college savings plan, you may be asking yourself, "What is the best use of my money?"
The right answer will depend on your personal goals, but there are several key areas to focus on as you prepare for a successful year financially. Let’s walk through some steps to consider when planning your financial strategy for 2025.
1. Assess Your 2024 Budget and Spending
Take time to review your budget and spending habits from 2024. Doing so will offer valuable insights into where your money went and help you make more informed decisions moving forward.
Begin by looking at your income and expenses from the previous year. Were there areas where you overspent or could have saved more? Perhaps you’re carrying high-interest debt that needs attention, or maybe you’ve been putting off saving for a specific goal.
Once you’ve reviewed last year’s spending, consider what you hope to achieve in 2025. If purchasing a home is a priority, allocating funds for a down payment will be essential. If you’re focused on reducing debt, creating a targeted debt repayment plan should be high on your list.
One effective way to stay on track with savings is to set up automatic transfers into a high-yield savings account, ensuring you’re consistently saving without needing to think about it each month.
2. Review the Updated IRS Contribution Limits for Retirement Accounts
The IRS adjusts its contribution limits for retirement accounts periodically to help individuals save more for retirement, and this year’s changes could impact your 2025 retirement strategy.
If you’re participating in a 401(k), IRA, or other retirement plan, it’s worth reviewing the new contribution limits. Adjusting your deferrals to maximize your retirement contributions can potentially reduce your taxable income if you’re contributing on a pre-tax basis and will also help set you up for a more comfortable retirement.
Even if you can’t contribute the maximum amount allowed, increasing your contributions by a modest percentage can have a significant impact on your long-term financial security.
Contribute enough to receive your full employer match and consider increasing your paycheck deduction to a retirement account by an additional one percent each year, if possible.
3. Start Thinking About Taxes
With tax season on the horizon, it’s important to start preparing now. Getting a head start can reduce stress and help you take advantage of opportunities to minimize your tax liability. One of the best ways to lower your taxable income is by contributing to tax-advantaged accounts like a Health Savings Account (HSA), 401(k), or IRA before the contribution deadline. For many of these accounts, you have until April 15 (or tax day) to make contributions for the prior year, which can give you some extra cushion in your tax planning timeline.
It’s also a good idea to gather important tax documents early, such as W-2s, 1099s, and any receipts for deductible expenses. Organizing these materials will make tax filing much smoother when April arrives. If your financial situation is more complex, consider consulting with a tax professional to ensure you’re maximizing available deductions and credits.
Starting your tax prep early will empower you to make informed decisions and help you avoid last-minute surprises when it’s time to file.
4. Review Your Investment Strategy and Asset Allocation
As you move into 2025, take time to review your investment portfolio and ensure your asset allocation is aligned with your financial goals.
Your investment strategy should reflect your risk tolerance, time horizon, and specific objectives. If you’re saving for retirement, for instance, perhaps your portfolio should be more focused on long-term growth. However, if you’re closer to retirement, you may want to shift toward a more conservative allocation to protect your assets.
Regularly reviewing and rebalancing your portfolio is important to ensure your investments remain aligned with your goals. Market conditions change, and over time, certain investments may become over- or under-weighted. If you’re unsure whether your current investment strategy is optimal, consider speaking with a financial advisor to assess your goals and get recommendations for adjustments that better align with your needs and time horizon.
The Best Use of Your Dollar
Ultimately, the best use of your dollar is the one that supports your goals and financial priorities, both now and in the future. As you begin 2025, take the time to carefully evaluate your financial plan and ensure that your money is working toward your most important goals. Small, thoughtful adjustments today can have a profound impact on your long-term financial well-being.
If you’d like to review your financial strategy and set a clear course for the year ahead, I would be happy to meet with you for a complimentary financial review. Together, we can create a plan that puts you on track to achieve your financial goals and build a secure future.
The opinions and analyses expressed in this presentation are based on Curi RMB Capital, LLC’s (“Curi RMB Capital”) research and professional experience are expressed as of the date of this presentation. Certain information expressed represents an assessment at a specific point in time and is not intended to be a forecast or guarantee of future performance, nor is it intended to speak to any future time periods. Curi RMB Capital makes no warranty or representation, express or implied, nor does Curi RMB Capital accept any liability, with respect to the information and data set forth herein, and Curi RMB Capital specifically disclaims any duty to update any of the information and data contained in this presentation. The information and data in this presentation does not constitute legal, tax, accounting, investment or other professional advice.
The content contained herein was generated by Curi RMB Capital with the assistance of an AI-based system to augment the effort.
