How to Get a Fast Start in 2025
You’re obviously someone who wants to do money right or you wouldn’t be reading this.
We’re 3 days into the New Year so it’s time for reflection, resets, and resolutions.
I’m not the biggest fan of lofty New Year’s Resolutions given their astronomical failure rate.
But there are some things you can do with your money in January that will have you thanking yourself in December.
Let’s dive in.
First: Pick a way to learn something new about money this year
Think of your favorite songs.
Did you sit down one day and memorize all of the lyrics?
Probably not.
You heard it once, then again, then again.
Over the course of weeks and months you learned it.
Money is the same way. You aren’t going to master it in one sitting.
You’ll learn it gradually over time.
You’re starting strong by reading this newsletter each week 🙂
Want to get stronger?
Try books and podcasts.
Here are three books I’ve read (okay, listened to) in 2024 that stuck out to me:
- The Psychology of Money by Morgan Housel
- The Algebra of Wealth by Scott Galloway
- Same as Ever by Morgan Housel
There are also countless personal finance podcasts. Find one that fits your vibe and give it a listen every once in a while.
You’ll slowly pick stuff up along the way and that’s the goal.
By the end of 2025 you’ll be far more knowledgeable about money than you are now.
Second: Update your 401(k) and IRA Contributions
Estimated Time to Complete: 7-10 Minutes
For 2025, the most you can contribute to a:
- 401(k) is $23,500, up from $23,000 in 2024
- IRA is $7,000 ← This is the same as 2024
If you have the income and spending habits to save $30,500 per year to retirement, these are the best ways to do it.
If hitting the max isn’t in the cards for you, I would go in this order until I hit my retirement savings goal:
- Contribute to your Pre-Tax 401(k) up to what your employer will match
- Contribute to a Roth IRA up to the $7,000 limit
- If money is left over, put the rest into the Pre-Tax 401(k)
Third: Start Contributing Regularly (or update your contributions) to a Brokerage Account
Estimated Time to Complete: 15-25 Minutes
Remember, your brokerage account is an investment account for all savings/investing not including retirement. Read a refresher on my blog here.
Brokerage accounts will help you buy a car, house, take vacations, and, in worst case scenarios, be a backstop if you ever depleted your emergency fund and needed more.
I’d set up a specific amount to be automatically taken from your bank account on the 3rd of every month (that way it takes the money after payday).
Investing make you nervous? Check out my previous pieces on investing basics to get caught up.
Fourth: Set a Stretch Goal for Your Money.
Estimated Time: 30 Minutes
Half of you identified yourselves as “highly-confident” about money when you signed up for this newsletter.
So, you’ve probably already taken care of these first 3.
In that case, let’s push ourselves.
Look at your saving and giving rate.
What would happen if you doubled each?
Look at your biggest discretionary spending category last year.
What would happen if you cut it by 30%?
If you’ve been out of college for a while, you likely have a lot of momentum in your current lifestyle.
Hopefully it’s a lot of good momentum (consistent savings, solid emergency fund, etc.).
But it’s probably not perfect.
Take part of January to look at the money habits you’ve formed over the last few years and challenge yourself to improve them in 2025.
This will look different for each of you.
Some of you may actually save too much and need to challenge yourself to confidently spend more.
Others will be the opposite.
After you do some reflection, reach out to me and let me know what your goals are - would love to hear them!
Change is always hard.
Hopefully these ideas make starting the change a bit easier.
Here’s to a great 2025 - see you next week!
