As 2025 dawns, millions of Americans are dreading the familiar ritual of making New Year’s resolutions. For nearly 80% of them, the focus is on health and fitness, according to a 2024 Pew Research Center poll. But close behind those empty promises to finally start hitting the gym, over 60% of respondents say they would like to prioritize their financial well-being.

Experts believe that financial and physical wellness go hand-in-hand. “How we handle our finances is very much tied to how we experience life,” says John Pharr, CPA, a tax and financial advisor based in Pensacola, Fla. “Our spending, saving, and money management habits reflect our psychological health. By getting a handle on them, we can dramatically reduce our worry and anxiety and regain a sense of control.”

Anxiety about finances is even more common than abandoned New Year’s resolutions. So if money worries are top of mind as you consider your 2025 to-dos, take a deep breath and read our six simple tips for getting a better handle on your financial life.

1. Understand your personal balance sheet

The first step in any financial wellness journey is to understand how much money you have and how much money you owe. Creating a personal balance sheet means taking a full inventory of all your assets, liabilities, and expenses. An honest tally should give you a clear picture of your financial status and help you create a thoughtful budget.

Assets include money in your bank accounts, brokerage accounts, and any retirement savings like a 401(k) or Individual Retirement Account (IRA). Liabilities are things like your credit card balances, home mortgage loan balance, car loan, or any personal loans. When you inventory your expenses, attempt to be as detailed as possible about your monthly and annual spending amounts.

This exercise is just the starting point, however. Knowing how much you have, how much you spend, and how much you own is a process, not a one-off task. The goal should be to regularly update your personal balance sheet, and use the exercise to drive your budget planning.

2. Be intentional about spending

Once you have a grasp on your personal balance sheet, you should also understand your monthly income and expenses. The next challenge is to align income and expenses so the former is greater than the latter most of the time if not all of the time, ensuring that your are not spending beyond your means.

Many consumers are making great strides on this front. A recent report from Euromonitor revealed that over 50% of consumers spend time researching before making purchases, while only 18% of respondents admitted they “often” made impulse purchases in 2024.

Join the 50% and get intentional about your spending. Pharr recommends conducting an audit of your spending habits by posing questions to yourself such as:

• Am I dining out too much? Food prices are up across the board, but cooking is still generally cheaper than paying restaurant prices. “And if your New Year’s resolution is getting healthier, eating more meals at home can help with that too,” says Pharr.

• How many subscription services am I actually using? Streaming platforms, gym memberships, meal kit subscriptions—purge the ones that are gathering dust.

• Do I really need that luxury purchase? Think expensive vacations, that new top-of-the-line smartphone, and the like. Less pricey alternatives are almost always close at hand.

3. Build an emergency fund

The only constant is change, and little is more frustrating than when the unexpected happens and upsets your best laid plans. Unemployment has risen half a percent in the U.S. over the last year, hitting 4.2% in November 2024. With the rise of AI and other disruptive technologies, more and more workers are concerned about their job security.

Whether your job is in imminent danger or not, there are plenty of other ways you could suddenly be unable to work. That’s why you’ve heard financial journalists for years telling you to build an emergency fund. But it’s still true, and we would advise you to keep it in a separate bank account from your everyday funds so that you don’t spend it accidentally—or on purpose.

Experts such as Kyle Enright, President of Achieve Lending, recommend setting aside an emergency fund that can cover 6-9 months of expenses. “Keep in mind that this is not the same amount as salary,” says Enright. “It’s only intended to cover essential expenses—i.e., not vacations, dining out, or other discretionary purchases.”

4. Get serious about retirement savings

With inflation still biting and expenses growing month after month, sometimes the easiest thing to cut are retirement contributions. Don’t do it. “Pay your future self first: Down the road, you’ll wish you had the benefit of that compound interest,” says Pharr. “Plus, contributions to traditional retirement accounts can lower your taxable income.”

If you manage to get through the holidays and have some funds left over, it’s not too late to make deposits to an IRA and have them fall under 2024 contribution limits. You have until Tax Day—April 15, 2025—to hit the maximum annual threshold of $7,000, or $8,000 if you’re over 50.

5. Optimize tax deductions and employer benefits

I recently received a message from my husband letting me know he was getting a raise—which should have been thrilling news, until I discovered this “raise” was actually correcting an error in his payroll records.

You see, we’ve been married for more than a decade, but apparently his tax filing status was never updated. His withholdings had been marked with zero exemptions for years, never having been updated to reflect he now has a wife and children. We’ve been giving the government an interest-free loan for too long—only getting those funds back with our annual tax refund, when we could have been putting them to use year-round.

If your tax-filing situation has changed, now is a great time to contact your HR department and make any necessary adjustments for the 2025 tax year. You should also take a look at any use-it-or-lose-it benefits such as a Health Care Flexible Spending Account (FSA). “Buy eligible health products before year-end or schedule that eye exam you’ve been putting off,” says Pharr.

6. Talk to a pro

For many readers, the advice above will feel very familiar. If that’s you, we’re happy to help jog your memory. But if these tips seem a bit overwhelming, call in a professional.

“Financial decisions are complex, and most people need help,” says Pharr. “Meeting with a financial advisor and getting a plan in place can be an enormous relief for most people. When you can stop worrying about money, it frees up a lot of mental bandwidth and makes space for real holiday joy.”

Once upon a time, financial advisors only catered to well-heeled clients with net worths measured in at least the seven figures. Those days are gone. Today it’s not hard to find advisors who charge flat hourly rates, with prices ranging from $200 to $400 per hour—typically with a $2,000 or $3,000 retainer. This is not a small upfront investment, but the benefits of professional money advice are invaluable over the long term.

Take the next step to financial wellness

Setting yourself up for better finances in 2025 doesn’t have to be an impossible mission. Acting on just a few of the tips above—especially number one—can arm you with stronger finances than you had last year. Then you can join the 56% of respondents to the Pew poll who said they kept at least one of their 2024 New Year’s resolutions.

Pharr recommends asking yourself a few questions before you proceed: Where did you overspend this year? What can you trim? This plan doesn’t need to be fancy, just something you’ll stick to. “The important thing is to hammer out the details and get it on paper, rather than making some vague ‘Spend less in 2025’ proclamation,” he says. “If it’s not written down, you won’t do it.”

That echoes a quote from one of my all-time favorite novels: “The most important step you can take is the next one.” Take the next step, and may 2025 bring you the financial wellness you seek.