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Financial Tips to Start the Year Off Right

A new year is a great opportunity to review your financial strategies and refocus on strong financial habits. As you begin 2026, the following tips can help you start the year off on strong financial footing.

Create a budget.

One of the best ways to gain control of your financial life is by establishing (and following!) a budget. Start by reviewing a year’s worth of bank and credit card statements to gain an idea of what you spend on both discretionary and non-discretionary expenses. Compare that amount to the income you bring in each month. Are you spending less than you make? If not, it’s probably time to cut back on some discretionary expenses.

Use the insight you gained in reviewing your income and spending to establish a monthly budget you can realistically stick to over time. There are several effective budgeting strategies to consider, based on your lifestyle and goals.

  • Zero-based budgeting – Using this method, you would assign every dollar of income to a specific financial category, such as expenses, savings or debt repayment. This allows you to have a plan in place for every dollar, ensuring that your income minus your expenses equals zero.

  • 50/30/20 budgeting – Using this method, you would allocate 50% of your income to needs (mortgage payment, utilities, groceries, etc.) 30% to wants (entertainment, gifts, vacations, etc.) and 20% to savings and debt repayment.

  • Envelope system – Some people find success in using an envelope system. This cash-only spending approach involves putting physical bills into envelopes labeled for specific expenses. For example, eating out, entertainment, groceries, etc. This approach can help you adhere to your budget by physically limiting your spending in certain categories.

Establish an emergency fund.
Not only can maintaining adequate emergency savings help you cover unexpected expenses, it also allows you to avoid selling out of investments at inopportune times, which could lock in losses during a market downturn. It’s wise to save three to six months’ worth of living expenses in a liquid account to cover emergency expenses such as medical bills, lawsuits, natural disasters, car accidents, etc.

Make a plan to pay off debt.
By its very definition, having debt means that your financial priorities are to someone else, not yourself. High-interest debt is particularly problematic, as it typically comes with high interest rates and fees that can significantly erode your ability to save and invest for your own financial future. Whether you carry credit card debt, student loans or another type of debt, the sooner you pay it off, the more financially secure you’ll be.

Two effective strategies for paying off debt include:

  • The avalanche method – This method involves paying off debt that carries the highest interest rate first, followed by the next highest interest rate until all of your debt is paid off. The benefit of this approach is that your payoffs pick up speed as they go because each payment saves you more money than the one before.
  • The snowball method – With this approach, you pay off your smallest loan as quickly as possible, then move on to the next smallest loan until you’ve worked through all of your debt. This method can give you a sense of accomplishment as you pay off loans one by one.

Maximize your retirement plan contributions.
The start of a new year is a great time to recommit to saving for retirement. Consider boosting the amount you contribute to your 401(k) and IRA. Even increasing your contribution percentage by 1% to 2% can have a big impact over time, and you’re unlikely to notice a difference in your take-home pay. At a minimum, make sure you’re contributing enough to your employer-sponsored retirement plan to receive the full available employer matching contribution.

Automate your savings.
Make saving as frictionless as possible by setting up automatic transfers from your checking account to your savings, emergency fund or investment accounts each payday. This “pay yourself first” approach allows you to focus on other things while ensuring your savings continues to grow.

Review and rebalance your investment portfolio.
If it’s been a while since you reviewed your investment portfolio, it may be time to check in on it. Over time, as certain investments outperform others, your allocation can drift away from its target, resulting in an overweighting of certain asset classes. This can lead to concentrated risk as one asset type begins to dominate your portfolio.

Rebalancing refers to the process of selling off some of the overperforming assets and reinvesting in the lower-performing assets in order to get back to your target allocation. This is an important way to ensure your portfolio continues to meet your needs and align with your risk tolerance. Your wealth advisor can help you implement a tax-efficient rebalancing strategy.

Check your credit report.
The new year is also a great time to check in on your credit score and review your credit reports for any potential fraud. Each of the major credit agencies provides one free credit report per year, which you can request at the following websites.

Review your subscriptions.
Take time to review your bank and credit card statements to identify any non-essential spending and subscriptions you’re paying for that you rarely use. Canceling these unused subscriptions can free up extra cash to put toward your financial goals.

Could you use some help starting the new year on more confident financial footing? North Oaks Wealth Management is here to help. We support clients in building strong financial futures, one brick at a time.Schedule a call to learn more.

This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal or investment advice. If you are seeking investment advice specific to your needs, such advice services must be obtained on your own separate from this educational material.
All investing involves risk including loss of principal. No strategy assures success or protects against loss. Rebalancing a portfolio may cause investors to incur tax liabilities and/or transaction costs and does not assure a profit or protect against a loss.