New Year, New (financially savvy) You - Your Roadmap to Financial Freedom and Independence

At the beginning of the New Year, many of us set resolutions to improve our health, relationships, and careers. But how often do we commit to sorting out our finances? Financial freedom doesn’t happen overnight, but with intentional planning and consistent action, you can take control of your money and create a secure future.?

This month I have published a Financial Planning Journal – My Money Map. This 12-month step-by-step guide to help you achieve financial independence. Each month focuses on a key theme, giving you the confidence to build better financial habits, increase your wealth, and reduce financial stress.?

This roadmap offers a 12-step guide to help you achieve financial independence. Each step focuses on a key theme, giving you the confidence to build better financial habits, increase your wealth, and reduce financial stress.?

Here’s how to make 2025 the year you take charge of your finances:?

1. Start with Your Money Mindset

Your relationship with money sets the foundation for everything else. Take time to reflect on your beliefs about money—many of which are shaped by childhood experiences or societal pressures.?

Your mindset around money is the foundation of your financial journey. Our beliefs, habits, and emotions surrounding money often form in childhood and are shaped by experiences, family attitudes, and even cultural norms. Sometimes, these deep-seated ideas can hold us back, making us feel anxious about finances or unsure of how to make the best choices for our future.

Take time to explore and challenge any beliefs that might be limiting your financial growth. This process isn’t about judgment but about gaining awareness and setting the stage for a healthier, more confident approach to managing your money.

Remember, building a positive money mindset isn’t just about thinking differently—it’s about feeling empowered to make choices that align with your values, goals, and dreams. Changing your mindset is a powerful first step toward building the financial future you want and deserve.

2. Set Clear Financial Goals

Setting clear financial goals is like mapping a route to your desired destination. Try to define what financial success looks like for you—whether that means building savings, investing for the future, or achieving financial independence. By setting specific, achievable goals, you’ll create a roadmap to guide your financial decisions and keep you motivated along the way.

Take your time to reflect on what matters most to you. These goals are yours alone, and they’ll shape the steps you take as you work toward a secure, fulfilling future. Make them SMART – Specific, Measurable, Achievable, Relevant and Time-Bound. For example, I will save ￡200 per month, for the next 12 months, to achieve ￡2,400 to spend on holidays in Mexico.

3. Simplify Your Finances

Now it is all about understanding your current financial situation and setting a solid foundation for the year ahead. By taking the time to review and organise your finances, you’ll set yourself up for success and build a roadmap for achieving your goals.

This is a great time to review bank accounts, credit cards, and recurring subscriptions. To simplify your finances, consider consolidating accounts or cancelling unused services

Begin by reviewing the past year’s financial highs and lows. Did you hit your savings targets? Were there unexpected expenses or splurges? Reflecting on what worked and what didn’t helps you identify areas to focus on this year.

4. Create a Budget That Works for You

Budgeting is a powerful tool that puts you in control of your finances. It helps you track your income, expenses, and savings so you can make informed choices that support your goals. A good budget isn’t about restriction; it’s about aligning your spending with your values and freeing up resources for what matters most to you.

Here’s how to get started:

• List Your Income Sources: Start by writing down all your income sources, from your salary to any freelance work or side hustles. This will give you a clear picture of what you have available each month.
• Track Your Expenses: Break down your monthly spending into categories, like essentials (housing, groceries), lifestyle (entertainment, dining out), and savings or investments. Being honest about your spending habits is key to creating a budget that works for you.
• Identify Opportunities to Save: Review your spending to see if there are areas where you can cut back or redirect funds toward your goals. Even small adjustments can make a difference over time.
• Set Spending Limits for Each Category: Based on your income and goals, decide how much you’ll allocate to each category. Setting limits keeps your spending intentional and ensures you’re making progress on your priorities. Use your online banking facility, you can use separate bank accounts, but we advise against keeping your money in envelopes.
• Check-In and Adjust Regularly: Budgeting is a dynamic process. Commit to checking in with your budget weekly or monthly and making adjustments as needed. This keeps you on track and lets you celebrate progress!

By following these steps, you’ll build a budget that supports your financial goals and empowers you to spend mindfully. Embrace budgeting as a habit—it’s an essential part of your journey to financial freedom.

5. Build an Emergency Fund

Having an emergency fund and clear savings goals can provide a solid safety net and a sense of security in your financial life. Now focus on building or strengthening an emergency fund and setting specific, actionable savings goals for short-term and long-term needs. Whether it’s preparing for the unexpected or working toward a big purchase, intentional saving brings peace of mind and future stability.

An emergency fund typically covers three to six months of essential expenses (rent/mortgage, utilities, groceries, etc.). Calculate what that would be for you based on your monthly spending. This fund serves as a cushion for unexpected situations like accidents and sickness, car repairs, or temporary job loss.

6. Understand and Manage Your Debt

Debt can feel overwhelming, but with a clear plan, you can take control and make steady progress toward financial freedom. Focus on understanding your debt, creating a plan to pay it off effectively, and building habits to avoid unnecessary debt in the future. Reducing debt can unlock more opportunities to save, invest, and enjoy financial peace of mind.

Begin by making a complete list of all your debts, including credit cards, student loans, car loans, mortgages, and any other obligations. Note the total balance, minimum monthly payment, and interest rate for each one. This will give you a full picture of your debt situation and help you prioritise. Prioritise the most expensive debt first.

7. Master the Basics of Investing

Investing can be a powerful way to build wealth over time, helping you achieve your long-term financial goals. Whether you’re saving for retirement, a major purchase, or simply want to grow your money, understanding the basics of investing is essential.

Begin by clarifying your investment goals. Are you investing for retirement, a child’s education, financial independence, or to grow your wealth over time? Knowing your goals will shape your investment strategy, including how much risk you’re willing to take and

your investment timeline.

8. Plan for Retirement

Planning for retirement may feel distant, but the sooner you start, the more comfortable and secure your future can be. Focus on building a strategy for retirement that fits your lifestyle goals. Look at ways to prioritise long-term savings, so you can enjoy peace of mind in the years to come.

Make a rough estimate of your monthly expenses needed in retirement. Remember to consider essentials like housing, healthcare, and groceries, as well as lifestyle expenses like dining out, entertainment, and travel. This can help you calculate your total retirement savings target. Financial planners often recommend aiming to replace 70-80% of your pre-retirement income.

Now calculate the total amount you’ll need to have saved by the time you retire. Typically, you would need to take the needed income in retirement, i.e. ￡20,000 and multiply by 25. Your target saving goal will be ￡500,000. Another rule is 4%, where you draw 4% of your pension pot per year, i.e. you have a pot of ￡200,000 and you could sustainably draw an income of ￡8,000 per year.

9. Tax Planning and Efficient Saving

Effective tax planning can make a substantial difference in your financial journey, helping you retain more of your income and achieve your goals faster. Focus on understanding the basics of tax planning, maximising available tax-efficient accounts, and optimising your savings for growth. Tax planning isn’t just for high earners; anyone can benefit from learning how to legally reduce their tax liabilities and save more effectively.

Individual Savings Accounts (ISAs) are a great tax-efficient tool available in the UK. There are several types of ISAs, including Cash ISAs, Stocks and Shares ISAs, and Lifetime ISAs, each with its unique benefits. Use this month to review how much you’ve contributed so far and make a plan to maximise your allowance by the end of the tax year.

Pension contributions provide substantial tax relief. In the UK, for every ￡100 you

contribute to a pension, the government adds ￡25 (for basic rate taxpayers), making pensions a powerful way to save for retirement. Higher and additional rate taxpayers can

claim back more via their tax return. Check your current contributions and consider

increasing them.

10. Protect What Matters

Financial security goes beyond growing your wealth—it’s also about protecting what you have and ensuring your loved ones are cared for, no matter what. Explore the essentials of insurance and estate planning to help you safeguard your family, assets, and future wishes. Understanding your insurance needs and having a plan in place for your estate can bring immense peace of mind and strengthen your overall financial plan.

Review all existing insurance policies, including life, income protection, home, car, and any specific policies for critical illness or disability. Make sure coverage amounts and terms align with your current needs. If you have dependents or significant assets, assess whether your life insurance policy provides enough financial security to cover expenses, debts, and other needs if you are no longer able to support your family.

11. Planning for major life events

Life is full of big milestones that often require careful financial planning—whether it’s buying a home, starting a family, going back to school, or changing careers. It is important to prepare financially for major life events so that you’re ready when the time comes. By planning, you can approach these milestones with confidence and clarity.

Start by listing significant events or milestones you anticipate within the next 5–10 years. Examples might include buying a home, getting married, having children, paying for education, or starting a business. Think about both personal and professional goals that may impact your finances.

12. Celebrate Your Wins and Plan for the Future

Recognising your achievements is essential for staying motivated and building confidence. Celebrate the habits you’ve successfully maintained, like consistent saving, paying down debt, or increasing your investment contributions. Use this reflection as a reminder of what’s working well and what habits you want to carry forward.

Consider where you might make improvements, whether it’s in spending habits, saving strategies, or investments. Are there areas where you want to be more disciplined? Now is a great time to pinpoint specific financial habits to work on going forward, whether that’s tracking expenses, automating savings, or minimising debt.

Final Thoughts: The Path to Financial Freedom

Achieving financial freedom doesn’t require drastic changes or quick wins. It’s about consistent, intentional steps that build a solid foundation over time. By following this 12-step roadmap, you’ll gain clarity, confidence, and control over your finances, setting yourself up for long-term success.?

The New Year is the perfect time to take action. Start small, stay consistent, and watch your financial future transform. Here’s to making 2025 the year you achieve financial freedom and independence!?

#financialfreedom #financialindependence #newyearresolutions

Glade Financial Ltd (FCA No. 978232) is an Appointed Representative of Julian Harris Financial Consultants (FCA No. 153566), which is authorised and regulated by the Financial Conduct Authority.