3 smart financial moves for your money to start 2025

The beginning of a new year is the perfect opportunity to set yourself up for financial success.

Here are three of the best steps you can take to make sure that you and your money are headed in the right direction for the rest of the year ahead.

1. Refresh your budget and set clear goals

Every successful financial plan starts with a solid budget. The beginning of the year is the perfect time to review and realign your spending habits with your current goals. Here’s how to get started:

• Review last year's spending Look back at your 2024 expenses and find areas for improvement.
• Adjust for life changes Have there been changes in your income, family situation, or other priorities? If so, update your budget accordingly.
• Set SMART goals Make your goals Specific, Measurable, Achievable, Relevant and Time-bound. For instance, aim to save a defined percentage of your income to pay down a specific amount of debt by a certain date.

Having a clear plan ensures you’re in control of your finances and working toward objectives that are meaningful to you.

2. Take advantage of tax-advantaged accounts

The start of the year is the ideal time to contribute to accounts that offer tax benefits. This helps you maximize growth and reduce your tax burden. Here are some options to help with that:

• RRSP (Registered Retirement Savings Plan) Contribute early to benefit from tax-deferred growth and deductions on your 2025 return. Don’t forget the deadline for 2024 contributions is March 3, 2025.
• TFSA (Tax-Free Savings Account) With another $7,000 of new contribution room added in 2025, you can use this account to grow your savings, tax-free.
• RESP (Registered Education Savings Plan) If you’re saving for a child’s education, early contributions help you maximize investment growth and government matching contributions.
• FHSA (First Home Savings Account) First-time homebuyers saving for their first home can take advantage of an FHSA, which combines features of both a TFSA and an (RRSP). You can add another $8,000 here each year.

Remember, by starting your contributions early, you take full advantage of compound interest and give your investments more time to grow.

3. Review and diversify your investments

Your investment portfolio plays a crucial role in achieving long-term financial stability. Kick off the new year by reviewing your investment strategy using these as a starting point:

• A quick performance review Are your investments on track to meet your financial objectives? If not, maybe it's time for a change in strategy.
• Rebalance your portfolio Adjust your asset allocation to ensure that you're still maintaining the right mix of risk and return. This might mean shifting funds between stocks, bonds, or other asset classes.
• Explore diversification Consider new sectors, markets, or investment opportunities to reduce risk or enhance potential returns.

Investments can get a little more complicated than the other two categories we covered above. So if you're unsure, or just looking for some basic help, we highly recommend speaking with a wealth management expert.

Questions?

If you have any questions about this article, need help with financial planning, or want to know more about the services we offer, please contact our wealth expert and partner, Tyler Brack or complete the contact form below.