Financial Fitness Resolutions for 2025
Did you know that around 50% of Australians make New Year’s resolutions? Chances are you were one of them! Research suggests that only a small percentage of people (around 8% to 20%) are successful in achieving their resolutions or goals.
Resolutions often revolve around areas of health (losing weight, exercising more), personal development (learning new skills), or improving financial habits (saving money, spending less).
So, let’s take a look at that last one. The team at GPP are happy to help guide you towards peak pecuniary performance. Here are a few handy hints that might help you fulfill your financial fitness goals this year, starting NOW!
1. Give your budget an overhaul
When was the last time you had a thorough look at your spending account?
There’s no time like the present to conduct an expense audit. You may be shocked to see how you’ve blown the budget over Christmas!
Many of us are guilty of subscribing to too many streaming services that we rarely use, as well as indulging in too many takeaway coffees, takeaway meals and too many impulse purchases.
A few small changes in your spending habits can add up to big savings. For example, a daily takeaway coffee habit costs you over $1800 per year. You can reduce your coffee budget by 75% or more if you brew your own.
2. Set Clear Financial Goals
• Short-Term and Long-Term Goals: Whether it’s paying off debt, saving for a vacation, or building an emergency fund, define clear financial goals for 2025. Make them specific, measurable, and achievable.
• Break Goals into Smaller Steps: Instead of focusing on the overall amount, break down large goals into smaller, actionable steps. For example, aim to save $500 a month towards an emergency fund.
• Prioritize Savings: Treat your savings like a non-negotiable expense. Aim to save at least 20% of your income. Set up an automated transfer to your savings or retirement
account to make it easier.
3. Build or Strengthen Your Emergency Fund
• An emergency fund is crucial for financial security. Aim to have 3-6 months of living expenses saved up in case of unexpected events (job loss, medical expenses, etc.). If you
don’t have an emergency fund, start with a small, manageable goal – like saving $1,000 –and gradually build from there.
4. Practice Mindful Spending
• Before making purchases, ask yourself: “Do I really need this?” or “Is this something that will improve my life in the long term?” Reducing impulse spending can free up money for more important goals.
5. Invest in Your Future
• Start Investing: If you’re not already, consider starting to invest. You don’t need to have a lot of money to get started—many platforms allow you to start with as little as $100.
Look into low-cost index funds, which are a great way to invest broadly across various sectors.
• Learn About Investments: Understand the risks associated with different types of investments. Over the long term, investing typically outperforms saving in a traditional bank account.
6. Protect Yourself with Insurance
• Make sure you have the right types of insurance: health insurance, life insurance, disability insurance, and home or renters' insurance. If you have dependents, life insurance is especially important to secure their financial future.
• Review your policies annually (no time like the present) to ensure they still meet your needs, and shop around. Insurance premiums can vary widely between providers for the same coverage.
7. Improve Your Credit Score
• A good credit score can save you money on loans and insurance. To improve your score, pay off any outstanding debts, ensure you make payments on time, and reduce credit card balances. You can check your credit report for errors or discrepancies and dispute them if necessary.
8. Limit Lifestyle Inflation
• As your income increases, it’s tempting to increase your spending. Instead, consider saving or investing any extra income. Try to keep your lifestyle expenses relatively stable and use the "extra" income for future financial security.
9. Educate Yourself Financially
• Make it a goal to read books, listen to podcasts, or take courses on personal finance. The more you understand, the better decisions you can make.
• Some great books to start with include The Barefoot Investor by Scott Pape (Australian), Rich Dad Poor Dad by Robert Kiyosaki, and The Psychology of Money by Morgan Housel.
10. Prepare for Tax Time
• Keep track of your receipts and any tax-deductible expenses throughout the year. If you’re self-employed, ensure you’re saving enough for tax time. The GPP team is ready, willing and able to help you optimize your tax strategy and avoid surprises.