January Reset - Simple Steps to Reorganize Your Financial Life
The start of a new year is the perfect time to reset and reorganize your financial life. January offers an opportunity to reflect on past habits, establish new goals, and set the tone for a successful year ahead. Whether you want to save more, reduce debt, or gain clarity over your finances, these simple steps will help you get started.
Step 1: Assess Your Financial Health
Begin by taking stock of your current financial situation. Review your:
Bank accounts: Verify balances and check for any unexpected fees or charges.
Debt obligations: List outstanding balances, interest rates, and payment deadlines.
Investments: Evaluate performance and confirm your asset allocation aligns with your goals.
Net worth: Calculate your assets versus liabilities to establish a baseline.
Understanding where you stand financially is the first step to making informed decisions. A good way to do this is to keep track of it in an up-to-date PFS (Personal Financial Statement). You can use software for this or even utilize a spreadsheet. If you’d like a free spreadsheet to help you with us, contact us for a copy.
Step 2: Set Clear Goals for the Year
Define specific, measurable financial goals for 2025. These might include:
Building an emergency fund.
Paying off a certain amount of debt.
Saving for a down payment on a house.
Contributing more to retirement accounts.
Write down your goals and break them into smaller, actionable steps to make progress throughout the year.
Step 3: Create or Revise Your Budget
If you don’t already have a budget, January is a great time to create one. If you do, revisit it to reflect any changes in your income or expenses. Focus on:
Identifying areas where you can cut back.
Allocating more toward savings or debt repayment.
Prioritizing needs over wants.
Budgeting apps and tools can make this process easier and help you stay on track.
Step 4: Automate Your Finances
Simplify your financial management by automating:
Bill payments: Avoid late fees by setting up automatic payments.
Savings contributions: Direct a portion of your paycheck to a savings or investment account.
Debt payments: Automate extra payments on high-interest debt to pay it down faster.
Automation reduces stress and ensures consistency in meeting your financial goals.
Step 5: Declutter Financial Accounts
Streamline your finances by:
Closing unused bank accounts or unused high-fee credit cards (be sure to understand any potential impacts to your credit first).
Consolidating retirement accounts for easier management (we recommend consulting a financial professional for help with this).
Organizing important documents like tax records, investment statements, and wills in a secure location.
A cleaner financial picture makes it easier to focus on what matters most.
Step 6: Review and Optimize Subscriptions
Take inventory of monthly subscriptions and recurring expenses. Cancel those you no longer use or need, and redirect that money toward your goals. Small changes can add up over time.
Step 7: Check Your Credit Report
Order a free copy of your credit report from each of the three major credit bureaus. Review it for errors, fraudulent activity, or areas for improvement. A strong credit score is essential for accessing favorable loan terms and financial opportunities.
Step 8: Plan for Taxes
Gather your tax documents and consider any deductions or credits you’re eligible for. If you’re expecting a refund, decide how you’ll use it to support your financial goals. Early preparation reduces stress as tax season approaches.
Step 9: Meet with a Financial Advisor
If you feel overwhelmed or want personalized guidance, schedule a meeting with a financial advisor. They can help you create a comprehensive plan and offer strategies to maximize your financial potential in the year ahead.
A January reset is a chance to take control of your financial life and build momentum for the rest of the year. By assessing your financial health, setting clear goals, and implementing these simple steps, you can create a solid foundation for success. We recommend printing this list and marking items off as you go.
At Greatstone Wealth, we’re here to support you on your financial journey. Contact us today to start your year with confidence and clarity.
