Step Into Your Wealthiest Self in 2025
Love it or hate it, money makes the world go round and if you can get your head around your finances, you may well find that things change, a lot.
Janeil Pierre is a Financial Consultant, Success Strategist, the CEO of The Financial Pilot and with her debut book out in 2025, I’m delighted that she is the resident money guru for YOMU. Each month she will bring you her knowledge and expertise so that you can make peace with cash and make it work for you, not against you.
Over to Janeil, and watch this space for more…..
Was 2024 a year of financial triumphs or challenges?
Either way, the insights you gain from reflecting on your year-end results could be the key to unlocking an extraordinary 2025.
As we approach the final days of 2024, it's time for that crucial financial review that sets the stage for a prosperous 2025. Regardless of currency, these smart money moves will help you close out the year strong and position yourself for success in the coming months.
Review Your Living Expenses Fund
This year has reminded us that having a robust living expenses fund (AKA emergency fund) isn't just financial advice – it's a necessity. Take a moment to assess your savings. The general rule of thumb remains 3-6 months of living expenses but consider your personal circumstances. A quick tip: calculate your monthly expenses by totaling essentials like housing, utilities, groceries, transportation, and insurance. Multiply that by the number of months you want your fund to cover. This gives you a clear savings target tailored to your needs. If you've dipped into these funds during 2024, now is the time to strategize about replenishing them. If you've been fortunate enough to maintain or grow your emergency fund, consider whether it needs adjusting for any changes in your living expenses.
Tax-Smart Decisions
For US readers, remember that December 31st is your last chance to make tax-advantaged moves for 2024. Consider maximizing contributions to your 401(k) or making charitable donations to optimize your tax position. For example, you could use tools like your employer's payroll systems to automate additional 401(k) contributions or explore platforms like Charity Navigator to identify impactful charities that align with your values. These steps not only help with taxes but also support meaningful causes. UK readers should review their pension contributions and consider utilizing any remaining ISA allowance before the April tax year's end. In both countries, check if you can harvest any investment losses to offset gains.
Retirement Check-Up
As 2024 winds down, review your retirement contributions. Have you maximized your workplace pension or 401(k) matches? These are essentially employment benefits that too many people leave on the table. If you've received a pay rise this year, consider increasing your retirement contributions accordingly. Remember, even small increases can have significant long-term impacts thanks to compound interest.
Credit Health Assessment
Pull your credit reports and review them for errors or unexpected changes. Consider using tools like AnnualCreditReport.com (in the U.S.) or Equifax's free credit report services to make this easier. These resources streamline the process and ensure you catch any inaccuracies that might affect your financial health. Since interest rates fluctuated significantly in 2024, consider whether any of your debt needs restructuring. Look for opportunities to reduce interest rates on credit cards or consolidate debt more efficiently.
Insurance Review
The end of the year is perfect for reviewing your insurance coverage. Has anything changed in your life that might affect your insurance needs? New assets, health changes, or family situations might require adjustments to your coverage. Compare rates across providers – loyalty doesn't always pay in the insurance market.
Budget Reality Check
How well did your 2024 budget serve you? Review your spending patterns over the past year. Many banking apps now offer yearly summaries – use these insights to identify areas where you can optimize in 2025. Pay particular attention to subscription services that might have crept into your monthly expenses.
Investment Portfolio Rebalancing
Market movements in 2024 may have shifted your investment allocations away from your intended targets. Review your portfolio and rebalance if necessary. Consider whether your risk tolerance or investment goals have changed and adjust accordingly.
Looking Ahead to 2025
Set clear, achievable financial goals for the new year. What financial milestone would you like to celebrate by this time next year? This reflective question can spark inspiration and help focus your ambitions. Whether building your living expenses fund, paying down debt, or increasing your investment contributions, make your goals specific and measurable. Break down annual goals into monthly targets to make them more manageable.
Create Your Action Plan
Don't let these end-of-year tasks overwhelm you. Create a simple checklist and tackle one item at a time. Consider scheduling a "money day" where you focus solely on these financial tasks. Better yet, involve your partner or family members to make it a collaborative effort.
Remember, this review isn't about perfection—it's about progress. Celebrate your financial wins from 2024, learn from any setbacks, and use these insights to build a stronger foundation for 2025. Whether you're working in pounds, dollars, or both, taking these steps now will help you start the new year with confidence and clarity about your financial direction.
The key to financial success isn't just in the planning – it's in the regular review and adjustment of those plans. Make this end-of-year review a personal tradition, and you'll be better positioned for financial success each year.
How's this for starting your new year on the right financial foot?
Janeil Pierre
Financial Consultant | Success Strategist
CEO of The Financial Pilot
TIK TOK | INSTAGRAM
