Start the New Year Right: Review Your Finances and Set Goals for 2025

By Samuel Mather-Holgate

The beginning of a new year is a perfect time to hit refresh on your financial plans. Whether you’re aiming to save more, reduce debt, set long-term investment goals, or planning to retire, reviewing your finances at the start of the year gives you a solid foundation to work from. This guide will help you take stock of where you are financially, set meaningful goals, and organise your affairs for a successful year ahead.

1. Why the New Year Is a Great Time to Review Your Finances

The start of the year often brings a renewed sense of motivation and clarity. It’s also a time when:

• Tax-year deadlines are approaching (deadlines for ISAs, pension and VCT contributions).
• Many people receive financial statements or summaries of the previous year.
• It’s easier to plan for the months ahead when the calendar is fresh.

Taking the time now to assess your finances can help you avoid surprises, identify opportunities, and ensure you’re on track to meet your goals.

2. Review Your Financial Position

Start with a clear picture of your current situation. Here’s how:

• Income and Expenses: Review your income sources and compare them to your monthly expenses. Are you spending within your means, or is there room for improvement?
• Savings and Investments: Take stock of your savings accounts, ISAs, and investment portfolios. Are they aligned with your goals and risk tolerance?
• Debts: List all outstanding debts, including credit cards, loans, and mortgages. Consider whether it’s time to focus on paying off high-interest debts.

3. Set Financial Goals for the Year

Once you’ve reviewed your position, think about what you want to achieve in 2025. Your goals might include:

• Building an Emergency Fund: Aim to save three to six months’ worth of expenses for unexpected situations.
• Paying Down Debt: Focus on reducing high-interest debt first, such as credit cards or personal loans.
• Increasing Pension Contributions: If you can, increase your pension contributions to take advantage of tax relief and grow your retirement fund.
• Saving for a Big Purchase: Whether it’s a house deposit, a car, or a holiday, set a clear target and break it into manageable monthly savings.
• Investing for the Future: Consider increasing your investments in ISAs, general investment accounts, or other vehicles aligned with your goals.

4. Review and Update Your Budget

A well-thought-out budget is key to achieving your financial goals. Use the new year to create or update your budget:

• Categorise your spending (e.g., housing, food, transport, entertainment).
• Identify areas where you can cut back to save more.
• Set realistic monthly savings and investment targets.

5. Review Insurance and Protection Policies

Ensure you and your family are adequately protected. Actually think about what would happen to you and your family if you couldn’t work, suffered a serious illness or died:

• Life Insurance: Does your current policy still meet your needs, or has your situation changed?
• Income Protection: If you become unable to work, will you have enough coverage to maintain your lifestyle?
• Critical Illness Insurance: Ensure you’re covered for any unexpected health challenges.

Review these policies with a financial adviser to make sure you have the right coverage in place.

6. Organise Your Paperwork

The new year is a great time to declutter and organise:

• Create a folder for important financial documents like bank statements, tax returns, and insurance policies.
• Digitise documents where possible for easy access.
• Dispose of old or irrelevant paperwork securely.
• Get help with a financial adviser who will sit down with you and go through these!

7. Plan for Tax Efficiency

With the end of the tax year approaching in April, it’s important to make the most of available allowances:

• ISA Allowances: You can save up to £20,000 per year in an ISA, free from income and capital gains tax.
• Pension Contributions: Maximise contributions to benefit from tax relief.
• Gifting Allowances: Use your annual inheritance tax gifting allowance (£3,000 per year) to reduce your estate.
• Inheritance Tax: changes come in 2027, but planning for this big amendment should happen now.

8. Seek Professional Advice

If you’re feeling unsure about where to start, working with a financial adviser can make a huge difference. An adviser can help:

• Set realistic and personalised financial goals.
• Create a robust financial plan.
• Identify tax-efficient strategies and investment opportunities.

9. The Benefits of Financial Planning

Taking control of your finances can bring significant benefits:

• Clarity: Knowing exactly where you stand removes uncertainty.
• Confidence: A clear plan gives you peace of mind.
• Security: Financial planning ensures you’re prepared for life’s unexpected events.

Conclusion

The start of a new year is the perfect time to reflect on your financial position, set meaningful goals, and plan for a brighter future. By taking proactive steps now, you’ll set yourself up for success in 2025 and beyond. With lots of consolidation between financial advisory firms, you may find yourself without an adviser. Morris Owen in Swindon has recently stopped offering financial advice and several other advisers left the industry in 2024. We are here for the long term, and are here to help and support you by offering comprehensive advice and excellent service.

At Mather & Murray Financial, we’ll help you navigate your financial journey. Whether you need help reviewing your investments, planning for retirement, or protecting your family, contact us today to arrange a consultation. Let’s make 2025 your most financially successful year yet!

CONTACT US here or BOOK A CALL BACK now.