Ten New Year Resolutions To Set Your Financial Planning Right In 2025

Treating your money the right way is as important as earning it. As many of us are busy making new year resolutions to improve our lifestyle, it's important to recognise that money is an important aspect of that journey. This is precisely why financial planning should make it to your list of new year resolutions, if you haven't focused on it already.

These are the financial resolutions that can help you set yourself up for a successful journey ahead.

Creating Budget

First and foremost, create a budget. This is the first step towards good financial planning. List all your incomes and expenses and find ways to save. If you are already saving, see if you can cut back on any insignificant expenses and save some more.

Building an Emergency Fund

Unexpected events often leave us in a bad state, emotionally and financially. Hence, having financial safety in place is very crucial. Aim at saving three-six months’ worth of expenses, so that you have security in a situation that may lead to any unexpected expense or job loss. One way to do this is setting up an automatic transfer to a high-yield savings account each month.

Automating Savings

If you are not likely to be consistent with savings, set up auto-debit to save a fixed amount each month. This will help you avoid unnecessary expenses that are likely to eat up savings.

Clearing High-Interest Debt

Make a list of the high-interest debt, like credit cards and high-rate loans. Prioritise paying those before putting in that extra amount to savings as high-interest debt can significantly impact one's financial progress. Make sure any bulk amount like bonus is used towards paying this debt.

Improving Credit Score

Credit score is like a report card of your finances that reflects your financial habits. Banks check your credit score before approving loans. To improve credit score, first check your credit report for any errors as they can harm your score. Keep the credit utilisation under 30%, along with payment of existing debt on time.

Retirement Fund

It is advisable to start saving for retirement as early as possible to enjoy the benefit from compound interest. Set auto-debit to transfer money towards a retirement fund which will bring you not just a huge sum in the later part of your life, but also peace of mind when you don't have an income source.

Investment Diversification

To reduce risks and enjoy consistent returns, work on a balanced and diversified portfolio that is a mix of stocks, bonds, real estate and others.

Earning More

If there are opportunities to earn more, monetise them. Turn your skills and interests into avenues to earn a little extra or look for part-time opportunities that can add weight to your pocket. This can improve your finances significantly and accelerate savings.

Insurance Coverage

Insurance is a significant part of financial planning as it protects us from risks during an emergency. Ensure you have appropriate coverage for health, life and vehicle, etc. If starting afresh, shop around for good coverage and premium. If you already have policies, review them and consider raising coverage wherever necessary.

Educating Yourself

Last but not the least, the key to having financial security is having appropriate knowledge on the subject. Improve your financial literacy through finance books, podcasts and courses, also available online.