It’s a new year, and while you may not necessarily buy into the whole “new you” concept that many people like to talk about every January, now is a great time to take stock of your finances. Whether you’re saving for a new home, funding a reno, or planning a move, the best time to start saving is now.
Sometimes, that’s easier said than done. But there are steps you can take to give yourself a fresh financial start in 2025 while getting on track to save for the living arrangements of your dreams.
Take Stock of Your Current Finances
January is an excellent time to go back and see how the past 12 months went. Maybe you spent too much over the holidays. Perhaps you started a new job or side hustle and weren’t sure what kind of money you could count on yet. Whatever your situation, you can learn a lot about your financial habits by seeing what you spend.
One good measurement is to see the current balance of your bank accounts and tally up any outstanding debts. Doing so lets you see exactly how much you owe while adding up how much money you’ve squared away for emergencies.
It’s also a good idea to see how much you were able to save this year, how much you earned overall, and how much you may have invested.
Create an Honest Budget
Creating an honest budget is easier when you have a clear picture of your current finances. If you’ve done budgets in the past but had difficulty sticking to them, perhaps you weren’t being honest enough with yourself.
If you’re the type of person who buys coffee every morning and lunch three times a week, don’t expect to change overnight. Ensure you include money for spending, take-out, gifts and emergencies in your bi-weekly or monthly budget, along with your bills and savings. A good rule of thumb is to save about 10 per cent of your salary after taxes, but that isn’t always feasible. Plan to save what works for you and treat that line in your budget like a bill.
Related: These Big Renovations Will Beef Up Your ROI
Write Down Your Goals
Now that you know what kind of budget you’re working with, write down your goals. They can be big-picture, like saving $20,000 for a down payment, or smaller, such as purchasing new appliances. Perhaps you want to paint your home and need a few hundred extra dollars. Or maybe it’s time to upgrade that crib to a bed.
Whatever your goals, estimate how much they will cost and when you want to achieve them. If you have several goals, list them from most important to least important, and decide what percentage of your savings you can put toward each item. The more detailed you can be, the better.
Meet With a Financial Expert
You’ll see some growth if you throw your savings into a regular bank account. But you may experience more growth by looking at investment accounts via a financial planner. They can help you get into investments, mutual funds, savings bonds and more, helping you grow your money more than a regular old savings account can.
Meeting with a mortgage broker is also a good idea if you plan to buy a home. They can help you put on paper exactly how much you can afford and what you need to save to get the best possible mortgage rate. Plus, many of them will lock in a rate with you that’s guaranteed not to go up over the length of your agreement.
Even if you have a financial planner or mortgage broker, the beginning of the year is a great time to check in and ensure your accounts are doing what they should. After all, life changes, and sometimes, we need to switch things up.
Related: Buying a Home Solo: It’s Possible and Here’s How to Do It
Be Patient
Saving $100 a paycheque for a home renovation or a down payment can feel like nothing. But even without interest, that’s an extra $2,600 a year that you’ve managed to put toward your goal. If you have a partner who can do the same, that’s $5,200 a year. In five years, you’ll have a $26,000 down payment. That number could be even higher depending on what interest you’re making.
The point is to be patient and trust the process. That goes for savings, budgets and goal-setting. We live in a world where we’re used to getting things we want instantly, but sometimes, good things really do come to those who wait. Your finances might not be perfect, but with time, determination and planning, 2025 can be the year you finally get on track.
