Celebrating Financial Wellness Month

The new year comes with many opportunities to assess your financial present and plan for the future. January is Financial Wellness Awareness Month, a time to slow down, regroup, and plan, especially after the hustle, bustle, and spending that occurred during the holidays. Gaining clarity about your finances early in the year can reduce financial stress, lay the foundation for long-term financial health and give you time to find a trusted advisor that can help with any complex decisions.

Observing Financial Wellness Month can be a gratifying experience—once you overcome the initial anxiety that may arise. If you need some direction on where to start, pick a few items from the list below. Remember: each step brings you closer to financial control!

1. Identify 2025 Financial Goals 

The best way to start your planning session is to identify your financial short and long-term goals. Financial planning is not just making good financial decisions. It's also identifying your goals and allowing them to drive your investment and wealth management decisions.

2. Check Credit Score

Your credit score impacts multiple aspects of your life, including loan rates, rental opportunities and access to credit. A credit score is a numerical representation of your creditworthiness. Monitoring it throughout the year and actively making decisions to improve it can positively contribute to your financial wellness long-term. You can get your credit score from your bank or credit card issuer.

Bonus: Need to improve your Credit Score? An easy way to do so is by setting each card to "Auto-Pay the Minimum" each month. That way, your payment is never late. To avoid interest payments, you can pay the balance in full or as much as possible before the due date.

3. Take Stock of Your Emergency Fund

An emergency fund is your safety net when unexpected expenses, or accidents, arise. Some important things to look at include:

• Your Current Balance: Ideally, your emergency fun has enough for 6-months of living expenses. Compare your monthly living expenses against your fund amount to determine how close you are to this goal.
• Updated Goals: Ensure that your savings goals reflect any new needs you may have in the new year.
• Account Type: A high-yield savings account can help your emergency fund grow faster.

Don't have an emergency fund? If you've assessed your budget and cannot determine how to build one, we can help. 

4. Tackle Your Credit Card Debt

Debt can grow quickly, eventually becoming stressful and overwhelming. The best strategy to eliminate debt differs from person to person. However, across the board, everyone can benefit from identifying the type, amount, and interest rate for all ongoing debt. The Avalanche Method and the Snowball Method are two popular debt-pay-off strategies you can utilize to begin as soon as possible.

5. Evaluate Student Loan Options

If paying off student loans is one of your goals, explore strategies that can help you pay faster:

• Extra Payments: If your budget permits, you can make extra payments on your principal balance. 
• Refinancing: You could obtain a lower interest rate or a lower monthly payment that better suits your budget.
• Loan Forgiveness Plans: After meeting specific criteria, some teachers, medical professionals, government workers, and nonprofit workers might qualify for full or partial federal student loan forgiveness programs.
• Consolidation: Consolidating multiple student loans into one can simplify your payments and sometimes lower your interest rate.

6. Review Your Insurance Coverage

Your life insurance needs change as your life changes. Our article, "Do You Have Enough Life Insurance", can help you learn more about what you should be considering when determining the appropriate life insurance coverage for you and your family.

Bonus: We can provide a life insurance assessment to determine the optimal amount and type of coverage for you.

7. Know Your Investment Portfolio

There is no better time than now to review your investments. A good investor knows what they own and why they own it. Periodically checking your investments allows you to assess whether they still match your needs and goals. Investing for retirement is a different strategy for investing for future college funds, so meet with your investment advisor to ensure your investment portfolio is appropriate.

Bonus: Use our handy Risk Score Calculator to quickly assess your investment risk and determine if adjustments are required.

8. Review Your Retirement Plans

Do the following to make sure you are on track to retire:

• Review Retirement Accounts:Start by examining all your accounts, including 401(k)s, 403(b)s, and IRAs. Be sure you know the details about each account, what institution manages them, and the balances in each. 
• Use a Retirement Calculator:Whether retirement is four years away or forty, use a retirement calculator to determine your time horizon and how much you should be saving each month.
• Increase Your Retirement Contributions:If your employer matches a portion of your 401(k) contributions, increase your contributions to the full amount in order to at least get the full match.  

9. Organize Your Estate

Ensure your assets pass properly with minimal loss. This includes financial and medical power of attorney, guardian trust for parents and minors, review of beneficiary designations, and assistance with Executor duties of an estate. If you have aging parents, now is also a good time to engage in open dialogue about planning for the future. Organizing your estate is a long, sometimes tedious, process. It may be a long journey, so be patient and know that the hard work will pay off. 

10. Increase Your Financial Literacy

There are many ways to increase your financial literacy, including reading books/articles on financial topics or following reputable financial bloggers or podcasters. Even a chapter before bed or a podcast episode a week is a good way to include financial literacy into your routine. 

Bonus:Follow Seren Wealth Advisors on LinkedIn for important updates, engaging articles and fun content.