January 2025 Checklist: Kickstart Your Year For Success

Start your year with purpose: A comprehensive guide to setting yourself up for financial success: When it is important – have a checklist. Would you be O.K. with a pilot taking you up in the air without a checklist? Why start your year without your own checklist? Wishing you a great year and here is a quick checklist to support that endeavor that has a little something for nearly everyone.

Take control of your financial future: Contact us for personalized support in implementing these strategies. Remember, no one can work forever – let’s create a plan that builds toward your ideal retirement, whether that’s in 5, 10, or 15+ years.

1. Review 2024 & Plan for 2025

Before diving into new goals, it’s crucial to understand where you’ve been. A thorough review of your 2024 finances creates the foundation for meaningful progress in 2025.

Understanding Your Spending Patterns

Monthly Expense Analysis:

• Gather all your 2024 bank and credit card statements

• Categorize expenses into:

  • Essential: Housing, utilities, food, insurance, transportation

  • Non-essential: Entertainment, dining out, shopping

  • Savings and investments

  • Debt payments

Anticipate 2025 Changes:

Housing Costs

• Mortgage/rent increases

• Property tax adjustments

• Insurance premium changes

Utility Expenses

• Rate changes for electricity, gas, water

• Phone and internet plan adjustments

Insurance Updates

• Health insurance premium changes

• Auto insurance adjustments

Family Changes

• Educational expenses

• Healthcare needs

• Life events (weddings, births, etc.)

Action Steps:

1. Create a spreadsheet or use a budgeting app to track all 2024 expenses

2. Calculate your monthly averages for each category

3. List all known or potential changes for 2025

4. Set realistic targets for each spending category

5. Document your findings and keep them easily accessible

   
   

2. Deep Goal Setting

Setting meaningful financial goals goes beyond simple number targets. The “5 Whys” exercise helps you uncover the deeper motivations behind your financial goals, leading to stronger commitment and better decision-making.

The “5 Whys” Exercise Explained

Finding Your Exercise Partner

Look for someone who:

• Has no emotional investment in your decisions

• Can maintain objectivity while being supportive

• Is comfortable asking probing questions

• Has some financial literacy (but doesn’t need to be an expert)

Real-World Example

Goal: “I want to save $50,000 this year”

• Why? “For a house down payment”

• Why? “To stop renting and build equity”

• Why? “To create long-term financial security”

• Why? “To provide stability for my family”

• Why? “To give my children opportunities I didn’t have”

Implementation Guide

1. Write down each of your financial goals

2. Schedule an uninterrupted hour with your chosen partner

3. Take turns with each goal, going through all 5 whys

4. Document every answer

5. Review your answers the next day

6. Refine goals based on your discoveries

7. Create a systematic implementation plan you can stick with

8. Specify subgoals with dates attached for each step along the way

9. Place this written plan in a place your can review every day (yes every day.)

10. Set a specific time once a month or quarter to check in with your partner on progress.

11. Celebrate successes (even the little ones)

    
    

3. Create Your Debt Elimination Strategy

Understanding and strategically approaching debt elimination is crucial for building long-term wealth. Let’s explore proven methods to tackle your debt effectively.

Debt Assessment

First, gather all your debt information:

• List every debt with current balances

• Note interest rates for each debt

• Record minimum monthly payments

• Document payment due dates

Choose Your Method

The Avalanche Method (Highest Interest First)

Best for: Minimizing interest payments and achieving the fastest mathematical payoff

• List debts from highest to lowest interest rate

• Pay minimum on all debts

• Put extra money toward the highest-interest debt

• Once the highest is paid, roll the amount you are now saving to the next highest rate

• Advantages:

  • Saves the most money in interest

  • Most mathematically efficient

  • Better for large debts with high interest

The Snowball Method (Smallest Balance First)

Best for: Building momentum and motivation through quick wins

• List debts from smallest to largest balance

• Pay minimum on all debts

• Put extra money toward the smallest balance

• After payoff, roll the amount you were paying to the next smallest

• Advantages:

  • Creates psychological wins

  • Builds confidence and momentum

  • Simplifies finances faster

Smart Credit Card Strategies

• Pay bills 3 days before the due date

• Use cards for planned, budgeted expenses only

• Take advantage of rewards programs

• Consider balance transfer options for high-interest debt

• Keep utilization under 30% of available credit

• Generally speaking, avoid canceling cards 

  
  

4. Maximize Savings and Investments

Creating a structured approach to savings and investments helps ensure long-term financial security. Follow this priority sequence for optimal results.

Priority 1: Emergency Fund

Target: 6 months of basic expenses – 

• Calculate your monthly basics:

  • Housing payments

  • Utilities

  • Food

  • Insurance

  • Transportation

  • Essential healthcare

• Multiply by 6 for your target

• Keep in three months in a high-yield savings account

• Keep the remaining three months in a brokerage account with conservative liquid investments that are higher yielding than the savings account.  

• Make it accessible but not linked to daily spending accounts

Priority 2: Employer 401(k) Match

Why it’s important: This is essentially free money

• Calculate your employer’s matching percentage

• Determine the minimum contribution needed for the full match

• Set up automatic payroll deductions

• Review and adjust contributions annually

• Allocate your investments appropriately and seek out a financial professional to help.

Priority 3: Roth IRA Maximization

2025 Contribution Limits

• Under age 50: $7,000 ($583.33/month)

• Age 50 and over: $8,000 ($666.66/month)

Income Limits for 2025

• Single filers: Up to $150,000

• Married filing jointly: Up to $236,000

New Opportunity: 529 plan rollovers now available for Roth IRA contributions

Priority 4: Additional 401(k) Contributions

• Max out remaining space after match

• Consider tax implications

• Review investment choices quarterly

• Rebalance as needed

Priority 5: Specific Financial Goals

Establish dedicated savings for:

• Home down payment

• Children’s education

• Business ventures

• Major purchases

• Additional retirement savings

  
  

5. Tax Planning

Strategic tax planning can significantly impact your overall financial health. Here’s how to approach it systematically.

Key 2025 Tax Deadlines

• March 15: LLC/S-corp returns

• April 15: Individual returns & Q1 estimates

• June 15: Q2 estimates

• September 15: Q3 estimates

• January 15, 2026: Q4 estimates

Self-Employed Tax Strategy

• Create a separate tax savings account

• Automate 25-30% of income for taxes

• Use a high-yield savings account for tax funds

• Maintain detailed expense records

• Consider quarterly estimated payments

Document Organization System

• Create digital and physical folders for:

  • Income documents (W-2s, 1099s)

  • Expense receipts

  • Investment statements

  • Charitable donations

  • Business expenses

• Review monthly for completeness

• Back up digital records regularly

  
  

6. Automation Strategy

Automating your finances removes emotion from money management and ensures consistency in your financial plan.

Paycheck Distribution

• Set up direct deposit splits: (pay your future self first)

  • Emergency fund contribution

  • Bill payment account

  • Investment accounts

  • Tax savings (if self-employed)

• Align transfers with pay schedule

• Review and adjust percentages quarterly

Bill Payment System

• Schedule all fixed payments:

  • Set for 3 days before the due date

  • Use a credit card for planned expenses

  • Automate credit card payments

• Review all autopay settings monthly

• Keep a buffer in the payment account

Investment Automation

• 401(k) payroll deductions

• Monthly Roth IRA transfers

• Regular investment contributions

• Automatic portfolio rebalancing

• Dividend reinvestment

Regular Review Schedule

• Weekly: Check account balances

• Monthly: Review all transactions

• Quarterly: Assess progress toward goals

• Annually: Comprehensive financial review