Aiming for financial stability has emerged as the leading aspiration for many individuals this year. According to a recent survey by a reputable data firm, saving more money tops the list of New Year’s resolutions for 2025. Despite the widespread desire to improve financial health, maintaining these resolutions can be challenging, with most people abandoning their goals within the first two weeks of January. To address this issue, Janelle Herrera from On Tap Credit Union offers practical advice on how to achieve financial success through a structured approach.
Herrera outlines four essential steps to help individuals stay on track with their financial objectives. First, understanding one's total income is crucial. This includes all sources of earnings, such as side jobs and freelance work. Next, tracking expenses is vital, with essentials like food, housing, and bills accounting for a significant portion of spending. Herrera recommends allocating about half to two-thirds of one's budget to these necessities. Additionally, setting aside funds for leisure activities is important. Herrera emphasizes the need for guilt-free spending, suggesting that around 10% to 20% of income should be reserved for enjoyment and self-care. Lastly, setting clear financial goals, whether it's purchasing a home or planning a special event, can provide motivation and prevent unnecessary spending. Celebrating small milestones along the way can also keep spirits high and maintain focus.
Once a budget is established, the next step is choosing a method to monitor finances effectively. Options range from using spreadsheets to leveraging mobile apps or collaborating with financial institutions. Automating deposits and bill payments can further streamline the process. Herrera also highlights the benefits of participating in "No Spend January," where only essential expenses are made. This practice can serve as an excellent reset after holiday overspending and foster healthier financial habits. Ultimately, Herrera stresses that any time is suitable for initiating a budget plan, encouraging everyone to take control of their financial future.
