As 2024 comes to a close and we look back on the events that shaped the world, now is a great time to reflect on your own personal milestones, achievements, and goals. Take stock of how far you’ve come and what you’ve accomplished, both financially and personally, as you set intentions for the new year.
To set the stage for a financially successful 2025, here are four practical steps from our team at Wealth Advocate Group to kick 2025 off on the right foot.
The first way to jump-start your financial plan is to set financial goals. Do you have a goal for your finances or are you just crossing your fingers and hoping you have enough for the lifestyle you want?
Specific goals with defined timelines will help to determine the best course of action, including how much risk you can and should take with your money.
For instance, if you’re looking for a guaranteed source of income, then you will probably want to stick with investments that will provide long-term security. Conversely, if you are looking for substantial growth, then you might want to take on more risk and invest less conservatively. Every dollar in your portfolio should be working toward a specific goal.
Remember that the best goals will be SMART:
If there’s one thing the last several years have taught us, it’s that it’s crucial to prepare for the unpredictable. Whether it be a pandemic, a lost job, or rising rates of inflation, sufficient savings can mean the difference between staying afloat during uncertain times and not having enough when you need it most.
If you’re not saving already, take steps to start putting a portion of your income away every month. Usually 10-15% of pre-tax income is a good guideline. Ideally, it is recommended that most people should have at least 3-6 months’ worth of non-discretionary expenses saved in a highly liquid, easily accessible emergency fund before saving toward other goals. If you have variable income, or your household only has one source of income, then saving up to 12 months of expenses can help safeguard your finances during times of uncertainty.
No matter how much you put away, consistent savings are the cornerstone of any solid financial plan.
As mentioned in Step 1, risk is fundamental to investing. Even “investing” by hiding cash under your mattress involves risk, since there’s always the chance of a break-in or increased inflation eating away at its value. To jump-start your financial plan in 2025, be sure to reevaluate the amount of risk you are taking in your overall portfolio.
It’s not uncommon for a portfolio to become unbalanced as the market ebbs and flows. What may have started out as a 60/40 allocation between stocks and bonds can easily become a 70/30 or 80/20 allocation, which is a significant difference in risk level. You may also find that you are too heavily concentrated in one type of asset or in one company’s stock. If this is the case for you, rebalancing and diversification should be explored.
Though risk is fundamental to investing, it’s also crucial that you aren’t overexposed to unnecessary risks. Take steps to evaluate your risk tolerance, based on your unique financial circumstances, stage of life, and personality, and be sure your investments align.
No matter where you are in your financial journey or the goals you’ve set, we’re here to provide support, guidance, and solutions for any challenges that arise. Partnering with a financial professional is a powerful step toward gaining control of your finances and planning for the future with confidence.
At Wealth Advocate Group, we offer the experience and resources to help you establish meaningful financial goals, grow your emergency fund, and assess your risk tolerance. Ready to kick-start your plan for the new year? Call 440-505-5704 or email jbrown@Wadvocate.com to schedule an appointment and get started today!
John Brown is a wealth advisor at Wealth Advocate Group, LLC, an independent, fee-based wealth management company. With over 10 years of experience in the financial industry and a background in accounting, John provides sophisticated and specialized services to his senior executive clients who need the expertise of someone well-versed in concentrated securities and restricted stock strategies, as well as the risk and tax burdens that come along with their compensation. John has a bachelor’s degree in accounting and financial management from Hillsdale College and is a CERTIFIED FINANCIAL PLANNER® professional. John is known for his thorough approach, often asking questions and bringing up details his clients have not considered. He strives to address every piece of his clients’ financial picture to make sure they are on the path toward their goals and financial confidence. In his spare time, John and his wife, Christina, enjoy traveling and staying active. You can often find him spending quality time with his friends and family. To learn more about John, connect with him on LinkedIn.
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