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Tips for Meeting Your Financial Goals in 2025

January 28, 2025

Image: Financial Tips

 

Our friends and customers frequently ask us for budgeting tips such as how to create a budget, how to save more money, and where they can find the best high interest savings accounts to make the most of what they set aside for a rainy day.

 

The right budgeting plan can help you meet your financial objectives whether you’re planning to buy a home, save up for a home improvement or some other project, or you’re trying to save for retirement.

 

Set Clear, Specific Goals

Instead of saying you want to “reduce debt” or “set some money aside” it’s important to have clear and measurable objectives such as reducing debt by a certain amount or saving a specific amount of funds.

It’s also good idea to have short-term, midterm, and long-term goals such as getting a particular loan reduced or paid off, building an emergency savings fund, saving for a major purpose such as a home improvement project, or saving for retirement.

 

You’ll need to consider your income, current expenses and debts, how they might change in the coming year, and how they line up with your financial goals.

 

Having clear and specific goals can give you something to focus on to guide your financial decisions for the coming year. You might be less tempted to splurge on unnecessary expenses and impulse items if you keep your longer-term financial goals in mind.

 

These goals can also help keep you focused on how to spend less money and how to pay off debt.

 

Image: Lifestyle Inflation

 

Create a Realistic Budget

When considering how to create a budget, you’ll need to account for all your income and expenses for the year, including your fixed costs such as your mortgage or rent, utilities, etc. You should also keep track of your past discretionary spending and choose realistic targets for the year.

 

If possible, your budget should include an emergency fund that you set aside for any unforeseen expenses that arise during the year. Try to set aside 20% to 30% of your income each month for savings and/or investments.

 

Using spreadsheets and similar apps to track your expenses can make budgeting much easier, especially if you update your information on a regular basis. It can also serve as a reminder to stay within your goals. Popular budgeting apps include: Mint, GoodBudget, Expensify, EveryDollar, and YNAB (You Need a Budget).

 

Automate Savings

Look for any automatic savings opportunities and ways to make your savings go farther. Having automatic deductions or transfers from your checking account into your savings or an investment account can ensure that you continue to meet your goals of investing and saving for the year.

 

This saves you the hassle of having to remind yourself of setting something aside from every paycheck. Just make sure that you’re setting aside the right amount each time, so you leave yourself with enough funds in your checking account to get through the month.

 

It’s also good idea to take a close look at where your savings are held. It could be worthwhile to open a new savings account if it offers a higher interest rate than what you currently have.

 

Cut Unnecessary Expenses

Take a close look at your spending habits and try keeping track of them. Putting all of your expenses into a spreadsheet or a budgeting app can help you identify areas where you could cut back and ways to save money.

 

A morning latte or a few drinks after work might seem like a trivial expense, but they do add up over time. When people look for ways of saving money, some of their most frequent targets include dining out/ordering takeout, subscription services that they don’t use very much, membership programs (such as the local gym) and extracurricular activities.

 

Once you have a good idea of your regular expenses, you can consider which ones to eliminate. For example, you might need coffee to get going in the morning but how much could you save by brewing a cup at home?

 

You obviously need to eat but having dinner and breakfast at home, plus bringing your lunch to work, can add up to significant savings over time.

 

Image: Investment Risk. Speak to an advisor.

 

Diversify Investments

That old saying about not putting all your eggs in one basket certainly applies to investing, as most investment advisors recommend a diverse portfolio that provides a balance of risks and rewards. You might consider a blend of stocks and bonds, real estate, and other options.

 

Keep in mind that higher-yielding investments tend to be riskier than slower-yielding investments, and many investors have lost their shirts trying to time their investments to any swings in the market.

 

That’s why many investors choose mutual funds and individual retirement savings accounts, such as an IRA, with a blend of stocks and bonds, or an index-based investment that includes several stocks (such as the S&P 500) rather than trying to pick individual stocks on their own.

 

It’s also good idea to examine your investment portfolio at least once a year and to consider rebalancing, or shifting funds around based on the performance of each investment and to make sure you’re not overly exposed to one particular risk.

 

For those who invest in individual stocks, it’s a good idea to work with a financial advisor because otherwise you’d have to spend a considerable amount of time trying to stay on top of market trends.

 

If your employer offers a 401(k) program any funds you contribute towards your retirement are done on a tax-free basis, so you can set something aside and reduce your income taxes at the same time. If your employer matches any of your contributions, you could make the most of this by contributing the maximum amount necessary.

 

For example, if your employer matches 401(k) contributions at up to 3% of your salary, you’d be leaving free money on the table if you didn’t contribute at least 3% of your income.

 

Image: Be prepared with an emergency fund.

 

Build an Emergency Fund

Financial experts recommend setting aside 3 to 6 months’ worth of living expenses in an account that you can access at any time. You’ll need to consider all your monthly expenses including rent/mortgage, utility bills, food and groceries, etc.

 

If this figure seems undoable, try setting a series of shorter-term goals of setting aside a particular amount each week or month. Meeting these shorter-term goals can help keep you motivated to meet your longer-term objectives and establish a real emergency fund.

 

Keep in mind that having an emergency fund available will not only insulate you against unforeseen expenses or loss of income, it can also protect you from relying on debt such as credit cards. These typically have high interest costs that can set you back financially.

 

Increase Income

Take a look at your work situation and see if you could be eligible for a promotion, or consider ways you could advance your skills or take on additional projects as a way moving into better-paying roles.

 

Maybe there are work-related classes you could take or certifications you could pursue that would improve your income. If your employer would be willing to pay for these courses, it’s a win-win situation for you.

 

You might also consider doing freelance work on the side, or a part-time job to increase your income. Are there any hobbies that you enjoy, or unique skills that you have, that you could turn into a side hustle and a source of additional income? Things like tutoring, baking, dog walking, or driving for a rideshare company are ways that you might earn additional money.

 

 

Open a Moody Bank Savings Account or Money Market Account to Start Building Your Emergency Savings Today!

At Moody Bank, we’ve served the Southeast Texas area since 1907 with some of the best savings accounts in Texas. We offer five different options for saving, including money market savings accounts.

 

Check out your Personal Banking page to learn more, contact us online, or visit one of our many locations in Houston, Austin, Friendswood, Galveston, Lake Jackson, New Braunfels, Pasadena, Seabrook, Pearland, League City, Texas City, Sugar Land, and Dickinson.

 

Investments are not deposit products and are, therefore, not insured by any federal government agency and not guaranteed by any bank. Investments comes with risks and may lose value. The information in this article is for informational purposes only and is not meant to advocate for or promote any one investment vehicle or strategy. Consult with your financial advisor to understand applicable risks and what makes sense for your personal circumstances.


Tips for Meeting Your Financial Goals in 2025 | Blog