Personal finances are a top priority for many households as they prepare to welcome the new year. According to a recent survey by Allianz Life, about 38% of Americans have identified financial stability as their primary focus for 2025.
CNBC consulted certified financial planners from its Financial Advisor Council to outline their top recommendations for households as they plan for the upcoming year. Here is the financial advice they shared:
Firstly, it is crucial to create and adhere to a budget. Additionally, maximizing retirement contributions and setting a personal financial goal, such as paying off credit card debt or investing an extra $100 monthly in an investment account, are recommended strategies.
Understanding where money is being spent is key. Tracking expenses over a period, including credit card and Apple Pay transactions from the past three months, can lead to significant behavioral changes once individuals have a clear picture of their financial habits.
Estate planning is emphasized as an essential task for everyone, regardless of age. Establishing health care and financial power of attorney documents, even for an 18-year-old heading off to college, is advised.
For those feeling overwhelmed by estate planning, starting with financial and health care power of attorney documents is a good initial step. Subsequently, focusing on beneficiary designations, wills, trusts, and revisiting life insurance can help individuals manage their financial affairs effectively.
Other financial considerations include reviewing insurance coverages, tax strategies, retirement planning, and cash flow management. Automating savings through retirement plans and setting up regular transfers to savings or investment accounts are recommended to build financial security.
Managing overspending involves identifying spending patterns, setting realistic budgets, and tracking expenses diligently. Despite market uncertainties, staying invested for the long term is advised, as historical trends demonstrate the benefits of maintaining investment strategies despite short-term fluctuations.
