How to Build a Winning Financial Plan for 2025
Can we all agree that with a new year, we really need to assess why we’re not retired yet?
Ok, I’m partially kidding… Every year, I spend hours planning how this year will be different from the last and most times, I find myself running against time to fit in this plan, but NOT this year.
This year, I think I’ve gotten the formula down pack and I figured why hold all this gold to myself?!
Here’s the thing, when making a dish, we may know all the ingredients but it sure does help to know the order to mix them in, and the temperature to keep the heat at, and all those nitty gritty that help produce the perfect taste, texture, and in the right timing… So is the case, in planning out Your Winning Year, you need to know the method and I’m here to share it with you.
Well, at least the financial peace to it.
Most of my clients who come to me to help me get their finances in order come to me because they’re looking for more than money; they’re looking to take ownership of this area in their lives; they’re looking to build confidence in themselves, to be able to say “I understand my money and I’m not ashamed of it because I’m in control!” A solid financial plan not only provides a roadmap for achieving our goals but also equips us to navigate unexpected challenges with confidence. That said, let’s dive into my favorite recipe:
1. Starting off, Let's Reflect on the Past Year
Before planning ahead, we have to understand our starting point. No, not just seeing what we have in the bank, but understanding the story of how we ended there. This may seem fundamental to you, but I implore you to approach this by completely surrendering to the process and taking it one step at a time. Do NOT SKIP! let’s take a moment to assess our financial performance in 2024; how did that dish turn out and what did we do. Here are some questions to answer:
Were there goals set last year? If so, here are set of things to consider:
What was the amount?
What caused you to reach or miss the mark?
Can what happened last year be multiplied or avoided?
How much did it cost to run my life for a quarter? (yes, 3 months)
What unexpected expenses arose, and how did we handle them?
Emergency fund decreased?
Did Debt Increase?
What opportunities were missed due to lack of preparation? (C’mon, there was at least one - write it down!)
Key note here is the following “Nothing wasted” - Understanding our wins and lessons learned will provide valuable insights as we create our plan for 2025.
2. Next, Let's Define Our Financial Goals
Be specific about what we want to accomplish this year. Break our goals into categories such as:
Ultimate goals: Starting off, let's be sure we know our ultimate goals before we get into details
What’s the number you want to earn? Give me the realistic number and the reach for the sky number.
What will your number cover? This is part of your “why” (the most noble/responsible version of yourself); C’mon we know part of the “why” is to be able to say “I did it”, nothing more profound than that and I’m here to tell you that that’s okay…”
Building/strengthening emergency fund,
paying off /decreasing a credit card (put the amount).
Charity/tithing
Trips
Gifts
Investments
The How: Now, let’s identify how we will get to that not so magic number. Outline the following
Current income (your W-2, your current company earnings, etc)
Write out services/offers you can put on the market to get paid for
Now, grab an excel sheet/google sheet or a paper & pen (if you’re feeling ancestral!, lol)
Create 4 columns labeled as: Offers/Services, Quantity, Total
Add a row for every service you can think of
In the last row, let’s create a total. This is where we’re tracking what our services/offers can yield us
Let’s add a “check” row. - In the cell under the grand total, we want to put the following formula (goal amount - cell above). This will be a quick way for us to see how far we are from the mark based on our offers
Next, let’s break it down into quarterly goals: This is the part where you break everything in specific quarters
Don’t just divide everything by 4, be realistic. Consider what campaign you’ll need to run to meet certain income mark
Fill in certain expenses for that quarter (i.e a home project, all those numbers we listed above)
Whether you’re getting married, starting a family, or planning for a big move, let’s incorporate these milestones into your financial plan. Research costs and make a plan to get those funds.
Get Monthly: Some items can be pinned down to a month, now is the time to do so. Break down the income goals even more
Let’s make our goals SMART (Specific, Measurable, Achievable, Relevant, Time-bound) to increase our chances of success.
3. Let's Create a Monthly Budget
Our budget is the foundation of our financial plan. Let’s track our income and expenses, ensuring every dollar has a purpose. A winning budget includes allocations for:
Essentials: (Rent/mortgage, utilities, groceries)
These are the things that are beyond our manipulation to a certain expense.
While we can’t help our needs such as medication, lodging, food; we can however keep some of those within our means by staying in a neighborhood that aligns more with our income, cooking more vs eating out, etc…
There are certain standards we can look at when we’re working with you to build out your “Judgment-Free Services” to ensure you’re staying within some set parameters
Savings: ( Emergency funds, Investments)
An emergency fund acts as a safety net for unexpected expenses, such as medical bills or car repairs. My advice is for you to aim to save three to six months’ worth of living expenses. If you’ve already started a fund, well, this might be the year that you reinforce with a solid 6 months. Now, the worst mistake you could make is to have these funds in a regular savings account. If you’ve had the misfortune of not knowing better, well, let’s fix this now and create a High Yield Savings Account. I personally use Marcus by Goldman Sachs.
Investments: Consider brokerage accounts and tax-advantaged accounts, starting with retirement accounts.
You know I have to particularly address taking advantage of tax-saving opportunities early in the year to avoid the year-end panic (trust me - these are real!). Be on the look out on our other communication for deeper breakdowns on all things retirement accounts, but for now, let’s just make sure you’re making room for those in your budgets.
On another note, you can still invest in after-tax brokerages. Whether you’re new to investing or looking to diversify our portfolio, we can start with these steps:
Make it a point to contribute regularly to retirement accounts.
Explore low-cost index funds or ETFs.
Seek advice from a financial advisor to align your investments with your risk tolerance and goals. While that’s not something we offer, we strongly encourage using Nectarine to find an advisor that will walk you through all your questions.
Life’s Wants: (Entertainment, dining out, hobbies.)
What’s life without a little fun?! Let’s make sure we plan to enjoy life in the land of the living while we’re living, just with some caution off course!
We use a tracker for our clients but you can use budgeting tools like “My Lunch Money” or apps to simplify the process. Just remember tracking your expenses on these apps won’t yield you results unless you’re intentionally checking in with yourself consistently.
4. While, everyone doesn’t have Debt to strategize around; if you’re not “everyone”, you might need to! Let's Tackle Debt Strategically
I know I’m preaching to the choir here but I’ll say it anyway - debt can hinder our financial progress if not managed effectively. So if you have debt, let’s prioritize high-interest debt first while making minimum payments on others. Consider strategies like:
Debt Snowball Method: Paying off the smallest debt first for quick wins.
Debt Avalanche Method: Focusing on debts with the highest interest rates to save money over time.
5. Planning does NOT make MAGIC happen. You need to Execute & Monitor!
Life is unpredictable, and your financial plan should be flexible. Schedule check-ins to:
Track your progress toward goals.
Adjust for any changes in income or expenses.
Reallocate funds to align with shifting priorities.
6. Last but not least, sometimes it’s really not you… it’s just... well, we need to bring in a Professional!
Yes, I’ll do a shameless plug here… At Ampliara, we can provide personalized advice and strategies to optimize your financial plan and help you create a plan to thrive financially. We can help you identify opportunities you might be overlooking and ensure we’re on the right path.
