New Year, New Goals: Start 2025 Strong with Strategic Financial Planning
Plan Before You Spend: How to Handle Bonuses and Pay Raises
It’s easy to mentally spend your bonus or anticipated pay raise before it even hits your bank account. This common habit can derail financial goals and prevent you from getting ahead. As discussed in “PVWP.Ep62” of The Retirement Readiness Project, hosts Katie Umland and Tim Regan recommend reversing this habit by holding off on spending until after funds are received.
Tim suggests prioritizing those extra funds for key financial areas such as building an emergency fund or paying down existing debt. Katie humorously reassures listeners that even with this sensible approach, there will still be room for enjoyment. The key takeaway? Adopt a “pay yourself first” mentality to ensure future financial stability.
Avoid the “Christmas Vacation” Pitfall
The classic film “Christmas Vacation” serves as a humorous yet enlightening reference in understanding the risks of assuming future income will cover current expenses. Just as Clark Griswold innocently banks on his Christmas bonus to pay for a new swimming pool, many people make financial commitments based on anticipated earnings.
Being proactive and responsible with your finances can prevent unexpected stress. Make decisions based on current resources rather than hoped-for income. This prevents falling into the trap of overspending and ensures a more secure financial footing.
Set and Achieve Realistic Long-Term Goals
The New Year brings opportunities for new beginnings. Katie and Tim explore how breaking down long-term goals into manageable monthly actions can make them feel achievable. By doing so, you create a clear path toward your future aspirations without overwhelming yourself.
Tim shares a story about someone passively waiting for a career change opportunity, emphasizing the importance of having a specific plan. Whether personal or financial, proactive planning is crucial for sustained growth and achievement. Writing down goals can help guide decision-making throughout the year.
Using Financial Tools for Better Management
During the episode, Tim highlights Quicken as an efficient tool for personal financial management. Quicken helps categorize expenses and track net worth over time, despite requiring an initial setup. The hosts clarify that their mention is not a sponsorship, using a humorous reference to “Wayne’s World.”
Incorporating efficient financial tools can significantly streamline your money management process, making it easier to stay on track with your goals.
The Importance of Morning Routines
Katie discusses the value of establishing a consistent morning routine, emphasizing her habit of waking up at 5 AM. This early start allows for a peaceful, organized beginning to the day before her children wake up.
Likewise, Tim shares insights on his family’s efficient routine, such as preparing items the night before to ensure smoother mornings. Simple, structured habits can improve daily productivity and overall well-being, laying a strong foundation for achieving larger goals.
Evaluating and Removing Pain Points
Tim suggests that end-of-year reflection isn’t just about aspirations but also about assessing life for painful elements to remove. By identifying and eliminating these stressors, you can create a happier, more focused environment for pursuing your goals.
Incorporating this self-reflection into your planning process ensures you address not only what you want to achieve but also what you need to eliminate to get there.
Creative Solutions to Common Problems
Katie shares her ongoing home projects, such as redoing the kitchen, and balancing these ambitions with existing responsibilities and financial limitations. Tim offers the creative suggestion of bartering services to get these projects completed, demonstrating that non-traditional solutions can often lead to success.
Thinking outside the box may provide unique opportunities to achieve your goals, even when they seem initially unattainable.
The Power of Incremental Change
Implementing new habits or changes incrementally, rather than overwhelming yourself with multiple resolutions on January 1st, was another valuable topic discussed. This approach can help sustain motivation and ensure long-term success. Starting small and building gradually can make significant goals more attainable.
A Year of Big Plans
Tim names 2025 “the year of the impossible,” with ambitious goals such as changing office buildings, releasing a book, and starting a tax service. His journey, including the literal challenge of learning to fly, underscores the importance of pushing beyond perceived limitations to achieve greater growth.
Next year, Tim plans to focus on financial management, with 2025 dubbed “the year of cache,” emphasizing a reassessment of spending and subscriptions. Being intentional with money management ensures a secure financial future.
Conclusion: Begin Now for a Successful Year Ahead
Setting intentional, achievable goals and being disciplined with financial management can significantly improve your financial health. By adopting a proactive mindset and creative approaches, you can make 2025 a year of meaningful progress.
Tune in to The Retirement Readiness Project for more insights on achieving your personal and financial goals!
