As we wrap up 2025, now is the perfect time to reflect, reset, and plan for 2026. These smart financial moves will help you start the new year with confidence and clarity.
Section 1: Review & Reset
- Conduct a Review of 2025 Finances
How you finished 2025 will be the foundation for how you start 2026. What went well? Where could you improve. This review could take many forms, but two things I really like to do is update my financial net worth. I’ve been doing this every 6 months for over 25 years. I’ve got a relatively simple spreadsheet with all of my accounts listed that I just keep adding columns to. It simply reflects the end-of-year totals for any bank, investment, loans, etc. I also track how much was contributed or disbursed from the account and the overall percentage increase or decrease in value.
The second thing I like to assess where I spent money during the year. Of those things, what brought me the most joy? How do I dedicate resources to do more of those things in 2026?
- Project 2026 Taxes and withholdings
For some, taxes may be fairly similar year-to-year. But, if you’re facing a transition, a job change or significant promotion, retirement, marriage, divorce, etc, you tax situation may be changing significantly. These transitions open the door for more focused tax planning. Make sure you’re withholding enough through your paycheck or making your estimated payments so you don’t pay additional penalties at tax time.
Section 2: Strengthen Your Financial Foundation
3. Increase Saving & Investing Amounts
The beginning of the year is a great time to increase how much you’re saving and investing. This is especially true if you are getting a cost of living or other salary increase. You’re haven’t gotten used to that money so why not invest at least a portion of it.
4. Automate Savings & Investments
Automating your savings and investments is one of the most effective ways to build wealth and ensure you stay on track with your financial goals. By setting up recurring deposits into your savings and investment accounts, you remove the temptation to spend what you intend to save and make the process much less dependent on what you have left This “pay yourself first” approach means that a portion of your income is automatically directed toward your future as soon as you receive it and less dependent on your willpower. Over time, these automated contributions can add up significantly. With automation in place, you can focus on other priorities, knowing your financial foundation is growing steadily in the background.
Automating your savings and investments is one of the most effective ways to build wealth and ensure you stay on track with your financial goals. By setting up recurring deposits into your savings and investment accounts, you remove the temptation to spend what you intend to save and make the process much less dependent on what you have left. This “pay yourself first” approach means that a portion of your income is automatically directed toward your future as soon as you receive it and less dependent on your willpower. Over time, these automated contributions can add up significantly. With automation in place, you can focus on other priorities.
5. Build or Replenish Your Emergency Fund
Is your emergency fund where it needs to be? 2025 was a tough year for many including Federal workers and military who have jobs typically regarded as “stable” because of the government shutdown. The general rule of thumb is to hold 3-6 months your regular expenses in an easily accessible account. If you’ve had to use that for emergency situations, it’s important that you start to rebuild that and maybe trend toward the higher side of how much you need to have available. Make sure you’re holding that in an account that’s actually paying some interest like a high-yield savings account or possibly a money market. Standard bank savings accounts are typically paying very little interest.
If you want to dive deeper on savings, check out 5 Ways To Optimize Your Savings.
Section 3: Plan for the Future
6. Plan Charitable Giving
If you’re charitably minded, map out your plan for the year even if you usually give at the end of the year. The One Big Beautiful Bill Act will allow those who take the standard deduction to deduct up to $1,000 for single filers and $2,000 married filers on their taxes for cash contributions to charities. For those who itemize, there is now a 0.5% Adjusted Gross Income floor for charitable deduction so bunching donations can potentially make even more sense.
7. Check College Savings
The beginning of the year can be a good time to review 529 plan contributions. Are you saving enough for college based on where you think your child might attend. This is harder to assess when your children are young, but once they’re in high school you probably will have a better idea if they’re looking at Ivy League or very expensive private schools or if they don’t think they will attend college.
Section 4: Protect What Matters
8. Review Life & Disability Insurance
It’s important to periodically review your insurance coverage. Do people depend on your income? If so, what would happen if you could no longer work? You want to make sure you’re properly covered. Many people think about this after major life changes, but checking these things every year or at least every other year can prevent nasty surprises if something unfortunate does happen.
9. Review Beneficiaries
Things change. Children are born; marriage and divorce happen; systems and accounts get updated. It’s important to review your beneficiaries regularly. I’ve written before how the TSP contractor and system switch caused many people to no longer have beneficiaries reflected in the new system. Additionally, beneficiaries on bank and investment accounts and insurance policies take priority over estate planning documents so make sure you’re keeping them up to date. This will help your loved ones avoid any additional surprises should something happen to you. Read more about beneficiary designations.
10. Update Your Estate Plan
Similar to your beneficiary review make sure you have estate documents and they reflect your current wishes. This is never a fun task, but you’re not doing it for you. You’re doing it for those who love you. You’ll also want to make sure your loved ones know where the documents are. Make sure you still want those how are identified as having powers of attorney are up to date and have a general sense of your wishes.
Bonus: Non-Financial Topic
11. Set One Non-Financial Goal
Doing these 10 financial things should give you more peace of mind and hopefully more time for non-financial things in 2026. So what does that look like for you? Set a goal. Whether that’s health and fitness, learning something new, or being a better friend or parent, it shouldn’t be only about money. Money is just the tool that can help you live a better life.
