If you want to sober up quick on New Year’s Day, open your credit card statement.
Americans are worried about money. They’ll probably be more worried in the new year, when they wake up, bleary-eyed, after a month of binge-shopping on gifts.
You may not be surprised, then, to hear the most popular financial New Year’s resolutions for 2025. They represent the opposite, basically, of what many of us do around the holidays, which is spend money and take on debt.
In a survey by The Motley Fool, the finance and investing site, consumers named “paying off debt” as their top financial resolution for 2025, especially credit card debt.
In a survey by Edward Jones, the investment firm, consumers named “building a savings account” as their top financial resolution. No. 2: paying off credit card debt.
A third survey, from the personal finance site WalletHub, yielded three top resolutions. Together, they sum up the aspirations of the American consumer: Save more, spend less, and make more money.
Build up your savings, or pay down your debt
Increase savings or reduce debt: They’re both great goals, financial advisers say.
“Get that momentum going to where you’re either building up your savings or paying down your debt, whichever you’re trying to accomplish,” said Robert Brokamp, a certified financial planner and senior adviser at Motley Fool.
But, which to prioritize? That’s a subject of endless debate.
If you enter the new year carrying credit card debt, many financial planners would urge you to pay it off pronto. Credit card rates hover near all-time highs.
Other experts would argue that savings comes first, especially emergency savings.
“That is the top thing I talk about with my clients,” said Nicole Schelkopf, a financial advisor at Edward Jones. “It keeps you out of debt.”
New Year’s resolutions are aspirational, and many consumers will enter the new year feeling very resolute. In the Edward Jones survey, 81% of Americans voiced confidence they can keep their New Year’s resolutions.
In the same survey, however, more than half of the consumers who made resolutions for 2024 admitted that they failed to achieve them.
But let’s proceed in the spirit of positivity. Here, from the experts, are five financial New Year’s resolutions for 2025, and some tips on how to make them stick.
Make a budget
“The fact that we’re on pace to end 2024 with over $1.3 trillion in credit card debt is a clear sign that we need to do a better job budgeting,” WalletHub reports.
You can keep a budget on a spreadsheet, mapping out a plan for how to spend your money every month. You can also use a budgeting app. Brokamp of Motley Fool recommends Budgets Are Sexy, YNAB (You Need a Budget) and Goodbudget.
Most big banks offer budgeting apps. You can even set them to alert you when you’re in danger of going over budget, said Chip Lupo, a writer and analyst at WalletHub.
If you need a budgeting goal, consider some variant of 50-30-20: Budget to spend half of your income on needs. Set aside 20% for savings, leaving 30% for “wants.”
Save for emergencies
Savings accounts come in many flavors. Retirement savings is a lifelong goal. Education savings dominates the parenting years.
But many finance experts consider emergency savings the most important category. It’s a fund to bail you out if you need a new roof, a new car, or a new job. Without emergency savings, a fiscal emergency can drive you into debt.
Aim to save enough emergency funds to cover three to six months of your expenses, said Schelkopf of Edward Jones.
A recent analysis by Investopedia, the financial media site, found that the typical U.S. household should have at least $33,000 in emergency savings. Yes, that’s a lot of money.
At least one-quarter of American households have no emergency savings account, Bankrate reports. If you’re in that group, maybe it’s time to start one.
Earn 5% on your savings
Not long ago, consumers struggled to find savings accounts, certificates of deposit or anything else that paid 5% in guaranteed annual interest.
The savings landscape has changed, thanks to elevated interest rates (and higher inflation) in the past couple of years.
Online banks, which operate mostly without physical branches, now offer an average interest rate of about 3.9% on savings accounts, according to WalletHub. It’s not hard to find a yield of 5% or better.
Repay 25% of your credit card debt
Credit card debt is rising. The tab now stands at roughly $10,870 per household, according to WalletHub.
Paying down that debt can be harder than it sounds. Let’s say you owe $10,000 on a card at 20% interest and want to pay it off by the end of 2025. To do that, you would have to make monthly payments of $926, according to a Bankrate calculator.
As a more modest goal, try to pay off one-quarter of your balance in 2025. For a household with around $10,000 in debt, “you’re talking monthly payments of about $225,” Lupo said.
Fortunately, the credit card industry offers one of the best tools for getting out of credit card debt: The zero-interest credit card. You pay no interest for a promotional period, typically 15 to 21 months.
“If you can move from a credit card that’s charging you 25% interest to a card that isn’t charging any interest, that’s going to be a big boost,” Brokamp said.
Make a retirement plan
Many of us fail to plan for retirement. In the 2024 Retirement Confidence Survey by the Employee Benefit Research Institute, only half of workers said they have estimated how much income they will need in retirement.
The easy way to plan for retirement is to work with a retirement planner. At a minimum, experts say, find an online retirement calculator. If you have a retirement or brokerage account, you can probably find a calculator on the website.
“Just see where you are,” Brokamp said. “Are you on track to retire when you want?”