As we enter 2025, this is the time of year when many people set New Year’s resolutions and try to make positive changes in their lives. Typical resolutions may include fitness-related ambitions (working out and exercising regularly), health and lifestyle changes (improving diet, scheduling checkups, or taking up a hobby), and financial goals. Given that the media often publicizes financial resolutions, this could be a great time to put the press to work for you!
Make sure to talk to Compliance first, and once you have permission, here are four popular New Year’s financial resolutions to blog, post, podcast, or conduct a seminar on.
Advisors can address this resolution in a number of different ways. They could suggest that people “pay themselves first” so that they are spending less than they earn.
An easy way to do this is to encourage clients to set up dollar-cost averaging so that a portion of each paycheck is automatically put into a specialized account. When clients do this as part of a 401(k) or other retirement plan, there are often tax breaks available, too. By doing this simple step, clients are now removing the temptation of spending the money and instead setting themselves up to build wealth.
Read more: Comparing the 401(k) vs. pension plan
As part of this messaging, you can encourage clients to revisit their emergency savings fund, which should equal roughly 3–6 months of living expenses for most people. Seasoned workers, high earners, and folks with highly specialized skills might find greater comfort if they had 6–12 months set aside.
Now could be a great time to discuss debt burdens and how and when to consider taking on debt with clients and prospects. Explain that debt should be viewed as a tool that can either be used to dig oneself into a hole or to build a better financial future; it all depends on what one purchases with that debt.
A simple rule of thumb is that at the end of the loan for good debt, the total payments are less than the current value of the purchase. With bad debt, at the end of the loan, someone has paid more than the current value of the purchase.
Credit card debt is usually considered “bad” for someone unless they are able and committed to paying it off in full each month. According to bankrate.com, the average credit card interest rate is greater than 20 percent, so it doesn’t take long for small charges on a credit card to pile up quickly. On the other hand, with good debt, such as a mortgage, clients may pay a large part of their income toward the mortgage, but they are also living in the home and building up future equity in the value of the house.
Most people work hard for their money but forget to ask their money to return the favor. For people to be financially successful, their money needs to grow. Inflation makes things more expensive each year, and we’ve all seen how everyday items have drastically risen in price.
Investing more (and investing smarter) is a crucial conversation for advisors to have with prospects and clients alike – because even careful investing plans need to be monitored. Life happens, and an investment plan that was started five years ago when a client was single and child-free might not make sense if they are married with children today.
Different investment strategies may also become more important over time, such as socially responsible investing (SRI), greater diversification, or the need for tax efficiency.
Sometimes, people set New Year’s goals to land a better job or to advance in their careers. There are countless opportunities to discuss stock options and perks, benefits, and other factors – in addition to salaries and bonuses – with your clients. You can also message carefully on the importance of keeping rollovers intact and not being tempted to spend the money.
By letting the media do the heavy lifting on the topic of financial resolutions, advisors can start the new year with a refreshed content strategy and pave the way for effortless, productive, and relevant client conversations.
Wishing all of you a prosperous new year ahead!
InvestmentNews speaks with lead LDI strategist Jeff Passmore.
Challenging conditions for investors as market remains pressured.
Poor economic outlook has weakened stocks this week.
HSBC survey is gloomy reminder of trade restriction impact.
Adult content platform is trying to diversify into the mainstream.
How intelliflo aims to solve advisors' top tech headaches—without sacrificing the personal touch clients crave
From direct lending to asset-based finance to commercial real estate debt.
