5 Financial Resolutions in 2025

A new year means new goals, including new financial resolutions. As you make your resolutions, consider these steps to start your new year on the right foot.

1. Review Your Budget

Even if you aren’t expecting big changes that could affect your finances, the new year is a good time to review your past spending and income. Your fixed expenses, like your mortgage or rent and car payments, will likely stay the same, but other expenses could rise. These include gas and groceries, some utilities, restaurants, and other entertainment. Review subscription services, like streaming and delivery services, to see if there are opportunities to cut spending for those that are rarely used. If you need help starting your budget or reviewing it, read Building a Basic Budget — Part 1 and Building a Basic Budget — Part 2.

2. Build Your Emergency Fund

An emergency fund keeps your finances protected when the unexpected happens, such as unforeseen medical expenses, home or car repairs, or in some unfortunate circumstances, unemployment. It’s a good rule of thumb to have three to six months’ worth of living expenses in your emergency fund. If you’re not there yet, set goals to increase this amount, such as moving 5% of your paycheck into a designated savings account each pay period. Texell offers Save First¹ Accounts that help power your emergency fund. For more tips read Emergency Fund: What You Need to Know and Do.

3. Review Rates and Consider Refinancing

The U.S. Fed Funds Interest Rate went down for the first time in 14 months in September 2024.² The Federal Reserve sets this rate based on the current economy, taking into consideration inflation, productivity, and employment rates. As these rates decrease, it’s a good time to reevaluate your financial accounts. Are you carrying a large balance on a high-interest credit card? Shop around for a lower-interest card or personal loan for balance transfers to reduce this debt. If you have a high-interest mortgage or auto loan, consider refinancing to reduce your rate or term. To view Texell’s current rates on loans, savings, CDs, and more, visit Texell.org/Rates.

4. Reduce Debt

Americans carry an average debt of $104,215 per household with the debt payment-to-income ratio of more than 11%.³ When reviewing your budget, plan to reduce your debt by cutting unnecessary expenses and reallocating those funds. There are a few methods to take when paying off debt, including the debt snowball and the debt avalanche. With the debt snowball method, you’ll make the largest payment possible on the smallest debt balance. Once it’s paid off, allocate that same amount to the next lowest balance. With the debt avalanche method, you start by reducing the debt with the highest interest rate. Learn more about both methods in Popular Strategies to Get Out of Debt.

5. Review Your Credit Score and Report

Your credit score shows your creditworthiness based on information in your credit report, and it’s good practice to review both regularly to be aware of potential fraud and identity theft. View your credit score and report in Digital Banking by enrolling in Credit Score, a free credit monitoring tool available to Texell members. You’ll also receive real-time alerts to better protect your account from fraud. You can also request your credit report once a year at no cost from AnnualCreditReport.com. If you find an error in your credit report, you can file a dispute to protect your credit history. Learn more about How to Correct Credit Report Errors.

Tips to Stay on Track

To help you meet your financial resolutions, make sure you set “SMART” goals—Specific, Measurable, Achievable, Relevant, and Time-bound. Using these guidelines helps to reach your financial goals, motivating you to set further goals. Here are a couple examples:

• Establish $1,000 in your emergency fund by June 30, 2025.
• Reduce credit card debt by 10% by April 1, 2025.

Review progress on these goals at the end of each month and quarter to make sure you’re still on track. Set smaller goals weekly and monthly to help you reach your larger resolutions for the year. If you face setbacks, adjust your budget as needed while still contributing to your savings account. By setting SMART financial goals and reaching them consistently, you’re on your way to long-term financial success.

If you wish to comment on this article or have an idea for a topic we should cover, we want to hear from you! Email us at editor@texell.org.