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As the new year approaches, personal finance remains a critical issue for many families across the United States. A recent survey by Allianz Life revealed that approximately 38% of Americans identified achieving financial stability as their primary goal for 2025.
In light of this, CNBC consulted various certified financial planners on its Financial Advisor Council to gather their top financial resolutions for households in the upcoming year. Below are their valuable insights and recommendations.
Kamila Elliott, Co-founder and CEO of Collective Wealth Partners
Kamila Elliott, a certified financial planner and co-founder of Collective Wealth Partners based in Atlanta, emphasizes the importance of rigorous budgeting. She suggests not only creating a budget but adhering to it diligently. Additionally, she advocates for maximizing retirement contributions and establishing a personal financial goal, such as eliminating credit card debt or investing an extra $100 each month into an investment account.
Barry Glassman, Founder and President of Glassman Wealth Services
Barry Glassman points out that improvement in financial health begins with understanding spending habits. He encourages individuals to take a close look at their expenses over the past three months, particularly through credit card and digital payment records. Gaining clarity on where money is being allocated can lead to significant behavioral changes.
Marguerita Cheng, CEO of Blue Ocean Global Wealth
Marguerita Cheng stresses the necessity of estate planning, highlighting that it’s crucial for individuals of all ages—including young adults heading to college. She shares a personal experience where she ensured her daughter completed essential documents like a healthcare and financial power of attorney before leaving for college. Cheng recommends starting the estate planning process with these basic documents and progressively focusing on beneficiary designations, wills, and trusts. This not only aids in formalizing financial intentions but also allows individuals to reassess their existing life insurance policies.
Additional Insights on Personal Finance:
The financial burden of living in today’s economy, as juxtaposed with whimsical childhood scenes from movies like ‘Home Alone,’ evokes questions about modern financial realities. Furthermore, with just 21% of workers currently contributing to a Roth 401(k), there remains a significant opportunity for financial growth through strategic retirement accounts. Lastly, the landscape of interest rates provides a favorable climate for cash accounts, prompting financial experts to advise homeowners and investors alike to stay informed and proactive.
Lee Baker, Founder, Owner and President of Claris Financial Advisors
Lee Baker outlines several key areas for thorough review. First, he highlights the importance of assessing all insurance policies—particularly auto, home, disability, and life insurance—given the sharp increases many have experienced. He warns against overlooking the consequences of not being adequately insured, especially for income replacement. Next, he advises individuals to scrutinize tax strategies and retirement planning while considering factors like required minimum distributions and charitable contributions that could enhance their overall financial situation. Finally, Baker encourages a fresh perspective on cash flow, especially after holiday spending sprees. Individuals should evaluate their interest rates and make adjustments to their budgeting strategies going forward.
Cathy Curtis, Founder and CEO of Curtis Financial Planning
Cathy Curtis underscores the benefits of automatic savings systems. Many employer-sponsored retirement plans offer automatic deductions, which facilitate effortless long-term savings. She recommends seamlessly setting up transfers to savings or investment accounts from checking accounts, simplifying the saving process with minimal oversight. Identifying spending habits is also vital; those prone to overspending should track their expenditures in key areas and aim to reduce their budget by 20-30% in the coming year. Additionally, Curtis advises maintaining a consistent investment strategy, regardless of market fluctuations, as historical trends suggest long-term investments are typically more fruitful.
Source
www.cnbc.com