Financial Resolutions for 2025

It’s no secret that the holiday season can leave many feeling financially drained. But the start of a new year is the perfect time to shake off that post-holiday hangover and set realistic financial goals that will set you up for success in 2025. At Midwest Heritage, we believe small, manageable steps can lead to lasting change, and we’re here to guide you toward a more secure financial future. By focusing on practical goals, you can lay a strong foundation for a stress-free year ahead.

Build or Boost Your Emergency Fund
For many Americans, unexpected expenses are a top concern. Having an emergency fund gives you a safety net, so you’re prepared for life’s curveballs without derailing your other financial goals. Start small – even $500 can give you a solid cushion to cover unexpected costs. Over time, aim to save three to six months’ worth of living expenses. Set up automatic transfers from your checking account to a high-yield savings account or have a portion of your paycheck directly deposited into a separate savings account. You can also trim unnecessary spending, like eating out less or canceling subscriptions you don’t use, to help build that fund.

Tackle Your Debt Strategically
There are a few strategies you can use to tackle debt – the key is to choose the one that works best for you. The avalanche method focuses on paying off high-interest debt first, while the snowball method starts with the smallest balance for quick wins. No matter which strategy you choose, make minimum payments on all your debts and direct any extra funds toward your target debt. One important note: try to avoid adding to your debt by sticking to a cash-based budget and holding off on nonessential purchases. Using credit can feel tempting, but those purchases can lead to higher costs due to accumulating interest.

Give Your Credit Score a Boost
Your credit score can have a big impact on your financial health, so it’s worth putting some effort into improving it. Start by paying your bills on time – setting up autopay or reminders can help ensure you don’t miss payments. Keep your credit utilization low by aiming for a ratio of 30% or less. It’s also a good idea to review your credit report annually or even quarterly to check for any errors and dispute them if needed. SavvyMoney Credit Score is a free tool for Midwest Heritage customers that allows you to gain a deeper understanding of your credit score and learn how to improve it. A high credit utilization can signal financial strain and could hurt your credit score.

Progress, Not Perfection
Remember, financial resolutions are about making progress, not achieving perfection. Even small changes, like saving an extra $20 a week or paying off one credit card, can add up by the end of the year. The key is to stay focused on your progress and celebrate the milestones along the way.