The new year is the perfect time to refresh your financial goals and gain better control over your money. Whether you’re planning for the long term or just looking to simplify your finances, organizing your financial life can bring peace of mind. Here are five key steps to get your finances in shape for 2025.

1. Update Retirement Plan Contributions for New Limits
Start the year by reviewing your retirement plan contributions. The IRS often adjusts contribution limits for retirement accounts like 401(k)s and IRAs, allowing you to save more. For 2025, you can contribute up to $23,500 to a 401(k) or 403(b) ($31,000 if over age 50; $34,750 if ages 60-63) and $7,000 to an IRA ($8,000 if over 50).

2. Review Your Budget
The new year is the perfect time to evaluate your budget. Start by looking at any new expenses you’ve taken on recently. Did you sign up for a new subscription service, or have you started a new hobby that’s affecting your spending?

Also, check for any recurring costs you no longer need—perhaps subscriptions you’ve stopped using or services you’ve outgrown. Eliminating these unnecessary expenses can free up money for other priorities, like saving or paying down debt.

A review of your budget ensures you stay on top of your spending and helps you make more intentional financial decisions in the months ahead.

3. Beef Up Your Emergency Fund
An emergency fund is one of the most important components of financial security. Aim to have three to six months’ worth of living expenses set aside for unexpected situations like medical emergencies, job loss, or major car repairs.

If your emergency fund is lacking, make it a priority this year to build it up. Consider setting up automatic transfers to your savings account so you consistently add to the fund each month. Even small contributions can add up over time, giving you peace of mind knowing you’re financially prepared for the unexpected.

4. Rebalance Your Investments
Rebalancing your investment portfolio is another key step to take in the new year. Over time, some investments will outperform others, causing your portfolio to drift away from its intended balance. Rebalancing ensures that your asset allocation remains aligned with your financial goals and risk tolerance.

For the reasons outlined above, completing the FAFSA is a smart choice for most families with college-bound students. It’s now a much simpler process, and with these tips, it shouldn’t take long. With college costs rising, it’s worth exploring every opportunity to reduce expenses.

5. Freeze Your Credit and Review Your Credit Report
To protect yourself from identity theft and fraud, consider freezing your credit. This prevents anyone from accessing your credit report to open new accounts in your name. You can freeze your credit through the three major credit bureaus—Equifax, Experian, and TransUnion.

Additionally, review your credit report for any errors or unfamiliar accounts. You’re entitled to a free credit report from each bureau once a year, so take advantage of this opportunity to ensure everything is accurate and up to date.

Starting the new year with these financial tasks will help set you up for a more organized and secure financial future. By updating your retirement contributions, reviewing your budget, building your emergency fund, rebalancing your investments, and protecting your credit, you’ll be on the path to financial success in 2025.