Over 20% of Americans have a financial resolution on their list for 2025. While this is great – you may have the most success by not making large, overwhelming promises to yourself. Instead, resolve to do just one or two specific things that will start to improve your financial life.
Aiming high is great but focusing on a few manageable steps toward a concrete goal is more likely to get you where you want to go. Similar to making extreme weight loss goals, such as going on a water & lettuce diet that will work, most people cannot maintain something so overwhelming. Better to make small changes along the way and then set new goals for yourself once those are accomplished.
So here are some more specific goals to choose from — and simple steps you can take to meet them.
PAY DOWN DEBT
Step 1: Figure out what you owe. One big mistake people make is they don’t know exactly what they owe because they’re too afraid to look.
Log into your credit card, debt and loan accounts to document ~ Who do you owe? What is your outstanding balance and minimum payment? What’s the interest rate? What’s the status of your account?
Step 2: Pick a pay-down strategy that best suits you. Here are three options to choose from: The snowball, the avalanche and the blizzard.
With the snowball strategy, you list your debts from lowest to highest and commit to pay the minimum on all but the smallest one. That’s the debt you will aim to pay off first by consistently paying more than the minimum owed.
Once it is paid off, take the payments you had been applying to that small debt and apply them to your second-lowest debt. Then repeat the same pattern until all your debts are cleared.
With the avalanche strategy, list your debts in order of highest to lowest interest rates. Again, commit to pay at least the minimum owed on all of them except for your highest-rate debt. That’s the debt you will pay off first. Once that’s done, apply the payments you’d been making on that one to your debt with the second highest rate. And so on.
Using the blizzard strategy, you list your debts by how much stress they cause you. Your goal is first to pay down the debt that stresses you out the most.
CURB SPENDING AND SAVE MORE
It really does help to create a budget so you know what and where you are spending your money every month. You can use a budgeting app to help. Some popular choices are Budgets Are Sexy, YNAB (You Need a Budget) and Goodbudget.
Pay yourself first! After setting aside some pretax (or Roth) earnings into your 401k – at least enough to get your employer’s full match — have a plan to automatically deposit your after-tax money into your accounts:
Bill-paying checking account: The first chunk goes into a no-cost checking account that is strictly used to automatically pay your recurring monthly expenses, like housing, utilities and childcare plus whatever recurring debt payments you have set up from the debt section above.
- ATM withdrawals/variable spending: Be sure to budget for cash withdrawals and your personal spending. These are not bills regularly due, but expenses that just ‘come up’ – personal care (nails/hair/massage), dinner with friends, etc.
Establish and fund an emergency savings account: This account should be an online high-yield savings account for your emergency/rainy day fund money, with the goal of having at least three to six months’ worth of living expenses.
Specific goals account(s): You may want to have a high yield savings account for large annual items like property taxes, vacations, home repairs/projects, etc.
SLOW AND STEADY WINS THE RACE!
If you’re not sure where to start — or just not sure how to attack something that is not on this list but is important to you (e.g., coming up with an estate plan), here are a few ways to move in the right direction in the first quarter of the new year:
Take baby steps: To make progress toward any financial goal, commit to spending as little as an hour every week or even every month on your finances.
In between those times, observe and think about your financial behaviors or worries. For example, pay attention when you go to a store like Target or Costco. Do you always go in for one or two things but come out with four or five others that aren’t essential? How can you plan for those shopping trips better?
Write down what you want: Deciding what’s important to you, and writing down a goal, as well as steps and deadlines to move you toward achieving it, can help motivate you to stay on track once you get started.
Seek Professional Guidance
Need help getting started? A financial advisor can help you review your finances and set up a manageable budget to get you started. You can schedule a call with Asti Financial to discuss your goals and how we can help you reach them here:
https://go.oncehub.com/15-Minute-Initial-Call