Top Five Financial Planning Moves to Make for 2025

When it comes to setting and achieving financial aspirations, you may be familiar with the SMART method, which can be a powerful and rewarding way to improve the likelihood of your success. Essentially, SMART goals are those that meet the following criteria: they are specific, measurable, achievable, relevant, and time bound. But if you’re overwhelmed by competing financial priorities, you might benefit from some suggestions on where to start and actionable steps that will help you accomplish these goals. For inspiration, consider integrating one or more of these measures that are easy to implement but can have a major impact on your financial well-being: 

Build your savings and investments by automating them. 

A highly effective strategy for growing your savings and investments is to make the process automatic. One way to do this is to set up recurring monthly transfers from your checking account to a savings and/or an investment instrument. Another option is to use payroll services to direct deposit a portion of your paycheck to one or more of these accounts, rather than having the entire paycheck sent to your checking account.

You could also consider using a multi-layered automated strategy to save and invest. For instance, you might use direct deposit to split your paycheck among your checking account and an IRA, then set up monthly recurring transfers from your checking account to a money market account, which provides instant access to your account, typically at a higher rate of return than a standard savings account.

Ready to level up by investing outside of your tax-advantaged retirement fund but want guidance in making sensible choices customized to your priorities? Micro-investing platforms like Acorns and Stash have made it easy and convenient to invest with features that automatically round up purchases you make to the next dollar to deposit your spare change into your investment account.

Review your auto payments to find subscription services and memberships that you aren’t using.

Setting time aside to audit your recurring charges for items or services that you no longer want or need often proves to be a productive way to find more money in your budget. With just a couple of hours, you may be able to save significant money by nixing items you won’t miss, such as services you enrolled in for a one-time use of the free trial, apps you’re not using, and subscription boxes that you enjoyed at one time but now just seem to create clutter in your home.

Review the last 12 months of your credit card and/or checking account statements to identify recurring charges you can eliminate. But don’t forget to check your apps and subscriptions that are billed through third-party providers like Apple, Amazon, or Google. For Amazon, visit their website and go to the “Accounts & Lists” drop-down menu on the top right side of the page, then click on “Memberships & Subscriptions.” To view and cancel subscriptions on an iPhone, go to “Settings,” then tap on your name and then “Subscriptions.” On an Android, visit the Play Store, then tap the box with lines in the upper-left corner (the menu icon) to find “Subscriptions.” 

Increase contributions to retirement plans, or at least ensure that you contribute to one consistently.

It’s important to keep in mind that even small contributions to a tax-advantaged savings and investment fund such as a traditional or Roth 401 (k) or IRA can potentially yield you sizeable returns with compounded growth over a long-time horizon. As a refresh, compounding refers to the process in which an asset’s earnings (capital gains or interest) are reinvested to generate returns from your initial principal as well as accumulated earnings from previous periods.

The sooner you start investing on a consistent basis, the more time your earnings will have to grow at an accelerated rate to build your nest egg and protect your future spending power from inflation. To illustrate, if you invested just $310 per month over 30 years in a retirement account with an 11% return, that account could grow to $869,400.

Generally, financial planners recommend to aim for investing 12 to 15% of your gross income (earnings before taxes and other deductions) in a retirement account each month after you’ve paid off any non-mortgage debt and have fully funded an emergency account. But if you aren’t ready to hit these target contribution levels, a reasonable and meaningful goal for you might be to increase your retirement contributions by a small amount this year, even if it’s as little as one percent. 

However, if your employer matches contributions to a qualified retirement plan like a 401 (k), experts typically advise contributing at least at least enough to the employer-sponsored plan to get the maximum match amount, as this is essentially free money. But as with any major decision you make regarding long-term financial planning, it’s advisable to consult with a trusted professional who can help create an investment strategy tailored to your life. 

The Police Credit Union does not provide Tax, Legal or Accounting advice. Members should seek their own professional counsel in these matters.

Protect your assets and your family’s security by reviewing your insurance policies.

Sufficient insurance coverage can go a long way toward providing valuable peace of mind, and it can help you avoid debilitating stress and setbacks that might otherwise occur after unanticipated events. Periodically, it’s important to review your insurance policies in all areas, which might include life, auto, homeowners (or renters), property, health, disability, dental, and any supplemental or umbrella policies you may hold. 

Especially during a transition period such as a new job, marriage, or divorce, you should examine policy deductibles, premiums, and benefits to get a clear understanding of where you stand. For instance, the arrival of a child is a good time to ensure that your estate planning wishes are well documented, and to consider the benefits of a life insurance policy that can safeguard your family’s financial security. A life insurance policy provides a tax-free lump sum cash payout to your loved ones if you die unexpectedly, but certain policies can provide important benefits while you are alive as well.

Consider consolidating high-interest debt.

Lastly, if you’ve accumulated a lot of high-interest consumer debt, one of the best ways you can improve your financial health and future security is to make paying it down a top priority. Interest on unsecured revolving debt such as credit cards typically compounds daily, and usually at a significantly higher rate than you’ll pay for other types of loans. 

When you pay just the minimum due each month, only a fraction of your payment is applied to your principal — a sizable proportion will cover the interest charges you have accrued. In other words, the more interest you rack up as you carry a balance on credit cards from month to month, the harder it becomes to pay off this debt.

Depending on your personal circumstances and credit profile, debt consolidation can be an excellent strategy for paying down debt at an accelerated rate and saving substantial money in interest charges. The process of debt consolidation enables you to pay off multiple debts with a new loan or a balance transfer to a new credit card. Preferably, you’ll obtain a more favorable interest rate for the new debt. By combining several balances into a single debt, you’ll only have to manage one payment each month. Moreover, transferring the debt to a new loan or credit line with a lower annual percentage rate (APR) can reduce the overall cost of your debt.

Lenders may also provide you with the funds directly so that you can pay off the individual debts yourself. For instance, if you qualify for a personal loan from The Police Credit Union, you can borrow up to $50,000 that can be used for any purpose. With our personal loan, you receive a lump-sum distribution, and pay the debt back at a low, competitive fixed rate. 

Another option that will enable you to streamline your debt payments and save on interest is to transfer high-interest debt from multiple credit cards to one credit card that will offer you a lower interest rate. When reviewing offers, make sure to note any balance transfer fees that could potentially reduce or negate your savings. If approved for a balance transfer to a Platinum Visa from The Police Credit Union, you can transfer your debt from several credit cards to one low-interest card with no fees.

The earlier you can tackle high-interest debt, the more you’ll save in interest charges – freeing up more money that can be used to grow your savings, buy a home, make investments, or even take a trip to a destination on your bucket list. Debt consolidation with a personal loan or balance transfer to a credit card with a lower APR can be a powerful tool for accomplishing this while making your financial life easier.