Experts: A 5-Step 2024 Financial Review Checklist for the New Year
Written by
Nicole Spector
Edited by
Molly Sullivan
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What a year 2024 has been for personal finance. We saw the stock market pick up steam, interest rates come down (along with the inflation rate) and an overwhelming surge in the popularity of crypto. And, of course, we saw Donald Trump sweep the presidential election, a victory that is still echoing across Wall Street.
Now, a new year is here and it’s time to reflect on the past 12 months and, more importantly, get your financial ducks in a row for 2025.
“It’s the perfect time to press pause and take a closer look at your finances,” said Stefan Greenberg, CFP, CFS, CLTC, managing partner, Lenox Advisors. “Year-end planning isn’t just about tying up loose ends; it’s about setting yourself up for a strong start in 2025. And while a financial review might sound overwhelming, a few simple steps can help you stay on track and move closer to your goals.”
So, what should you do in 2025 to get a fresh start? Here’s a five-step guide to help you have a financially successful year.
1. Ensure You Have Emergency Cash Set Aside
How much were you able to put away in your emergency fund? If, like so many Americans, you fell behind here, make setting cash aside for the inevitable unexpected expenses a priority.
“It’s critical to have enough cash set aside in case you find yourself without a regular paycheck,” said Ryan A. Hughes, founder and portfolio manager at Bull Oak Capital. “We have been seeing an economic trend of declining job openings and employees showing increased hesitation to quit their current roles. If the U.S. economy experiences a sudden shock, such as a geopolitical event or a market downturn, we could see a spike in layoffs.”
Hughes recommended maintaining at least six months’ worth of living expenses in a high-yield savings account (HYSA).
2. Review Your Asset Allocation To Hedge Against Risk
Though no investments are 100% protected, and there is always inherent risk involved, it’s wise to check your asset allocation and make sure it’s tailored to be as well guarded against volatility. This means really digging into your investment portfolio and giving it all a good hard look.
“2024 has been a phenomenal year for stocks and cryptocurrencies,” Hughes said. “It is time to rebalance your portfolio by trimming your winners and reinvesting those proceeds into another asset. No asset class will continually go up with periods of volatility. We are expecting volatility in 2025. You want to make sure your portfolio matches your personal risk tolerance.”
3. Check Your Insurance Coverage
Every year brings changes — some years bring bigger ones than others. What was 2024 like for you? Take inventory as you gear up for 2025.
“If you’ve had any life changes in 2024, such as having a new child, buying a home or experiencing income growth, now is a great time to update your health, life, disability and property insurance policies,” Hughes said. “You want to make sure you are protected without overpaying for coverage.”
4. Proactively Manage Your Tax Liability — Before April
“You have until Dec. 31 to ensure that you are keeping more of what you earn and not paying too much in taxes,” Hughes said. “Make sure that you are fully participating in your potential deductions, such as your 401(k) plan and HSA. If you have any losses in any investments, you can tax-loss harvest those losses to offset any capital gains.”
5. Hone and Kick Off Your 2025 Financial Goals
When better to start creating and honing financial goals for the year than right when it kicks off? Take some time to reflect on what you want to accomplish in 2025 and beyond. Seize the moment while the momentum for positive change is in the air.
“Write down your short-term (1-3 years), medium-term (4-10 years) and long-term goals now,” Hughes said. “Then, assign a dollar amount and timeline for each goal.”
The next and final step is to activate these financial goals.
“If your goal is to save for a down payment on a house, set up a recurring transfer from your checking account to a HYSA,” Hughes said. “The trick here is to automate this process instead of manually transferring these funds. Life tends to get in the way, and for one reason or another, you will likely find yourself not saving for this goal. This way, you can be sure that you are on track for this goal throughout the year.”
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