As 2024 comes to a close, you may be making new year’s resolutions. As part of planning for the new year, you should start planning ahead for your financial future. With rampant inflation looming and possible tariffs skyrocketing the cost of everyday goods, the need for a financial plan is more important than ever, especially for Gen Z. Although you may not achieve all of these goals, setting ambitious but achievable financial goals will help motivate you and keep you accountable. Today, we’ll go over 5 important financial goals that can help set you up for success in 2025 and beyond.

1. Build a Robust Emergency Fund

Life is unpredictable and you never know what will happen. Having a robust emergency fund is as important as having health insurance and car insurance. It ensures you’re financially prepared for any unexpected circumstances like medical bills, sudden job loss, car repairs, or home repairs that could lead to large unexpected expenditures. Most Americans don’t have enough savings to cover a $1,000 unexpected expense, don’t let that be you!

You should aim to have at least 3-6 months worth of living expenses in a high-yield savings account. This should be the amount you need to survive on and should only factor in necessity expenses, though if you want to add more money, nobody is stopping you. If it sounds difficult to pull together that much money, that’s because it is! It’s not easy, but it is straightforward. Start small and try to automatically take money from your paycheck and put it towards your emergency fund. You can start small, but make sure to contribute a bit every month. This is called paying yourself first, which ensures you’ll actually save for your goals, rather than spending your money first and then worrying about saving at the end of the month.

This financial cushion protects you from needing to rely on credit cards or short term loans,  which can have astronomical interest rates of 20% or higher, in the event of unexpected expenses. It will help keep you on track toward long-term financial stability. Read our post on emergency funds for more in depth information, and consider making an emergency fund part of your 2025 resolutions!

2. Avoid High-Interest Debt

High-interest debt, particularly from credit cards or short term loans like personal loans or payday loans have extremely high interest rates. While you may know from our previous post that compound interest can work greatly in your favor given a long time horizon, it can also work against you when it comes to debt. High-interest debt can and will accumulate quickly over time and cost you more over time. If you continue to make minimum payments and let the debt accumulate, it becomes overwhelming and extremely hard to manage.

Your first priority should be making sure that you don’t get into high interest debt in the first place. Building an emergency fund is a great start towards avoiding high interest debt. Next, you should aim to spend less than you make and certainly do not borrow money for non necessities like clothing, technology, etc. Buy-now-pay-later services are especially prevalent nowadays for purchases and are a very easy way to get into a lot of consumer debt. Avoid impulse buying and spending more money than you actually have.

If you already have high interest debt, you should focus on paying them down as quickly as possible. Paying the minimum balance is not enough and will just result in an ever-increasing balance. There are two main methods for paying down your debt, which are the debt snowball method and the debt avalanche method. The debt snowball method involves paying down debt from smallest to largest balance, which can provide psychological benefits by seeing progress being made. The debt avalanche method focuses on simply paying down your debt from highest interest rate to lowest interest rate, which mathematically makes the most sense since you will pay the least interest. I would suggest the debt avalanche method, but whichever one you pick you will be well on your way to a better financial future.

3. Create and Stick to a Sustainable Budget

A sustainable budget is the backbone of financial success. If you spend all of your money every month, you’ll never be able to save up for an emergency fund, a house, or a car, and you certainly won’t be able to invest. Creating a budget is essential to being able to plan for your future financial success. Creating a budget doesn’t mean you have to give up your quality of life and all of your favorite things—it’s about being intentional with where your money is going. An important tip is to figure out where money has the most value to you. It may be travel, food, technology or anything else, but you should prioritize what makes you happy and try to cut back on the things that are unnecessary and/or don’t provide you a ton of happiness or value.

A simple budget to follow is the 50/30/20 rule, which allocates percentages of your after-tax income.

• 50% for necessities (housing, food, transportation)
• 30% for wants (entertainment, dining out, clothing)
• 20% for financial goals (savings, investments, debt repayment)

Use budgeting tools like Empower or Rocket Money to track your spending and expenses. A well-planned budget keeps your future financial goals in check while allowing you to enjoy life now.

4. Start Investing Early

While saving is essential to getting yourself out of debt and building an emergency fund, saving alone is not enough to set yourself up for a prosperous financial future and retirement. In order to build wealth and retire (either early or at a traditional retirement age), you need to invest and take full advantage of compound interest.

The sooner you invest the more time your money will have to compound and the better off you will be in the future. Set up automated transfers to your investment accounts and prioritize tax efficient accounts like your 401k and Roth IRA. Then just invest in broad market ETFs, like VOO and VTI, and set it and forget it. Read our post on getting rich with stocks in your 20s for a full overview of the basics of stocks and tax efficient accounts.

5. Plan for the Future

Financial freedom and security doesn’t just happen on its own—it’s built through discipline and smart planning. Just by reading this post, you’re already thinking about your financial future, which is a great start. Continue to set long-term financial goals that are both achievable and ambitious like saving for retirement or for a home. By setting goals that are ambitious, but achievable, you’ll ensure that your goals are actually meaningful and can push you to continuously improve and grow.

Don’t forget to plan beyond just your finances—develop a roadmap for personal and career growth, and ensure you’re living life to the fullest. The earlier you start on any goals, the easier it is to achieve them and create a better future for yourself.

Wrapping up

With this knowledge, you have the ability to take control of your financial future in 2025 by focusing on these five key goals: building an emergency fund, avoiding high interest debt, budgeting, investing early, and planning for the future. By prioritizing these areas, you can create a strong financial foundation and build towards financial security and prosperity. Start small, stay consistent, and keep your goals in mind. Every decision you make today will affect your future self, but remember to maintain balance and not go too overboard on saving or spending.

Disclaimer: The content provided on this blog (Zooming to Fire) is for informational and educational purposes only. It represents the opinions and perspectives of the authors and should not be considered as financial advice. The authors are not licensed financial advisors, and no content on this blog should be in any way interpreted as professional financial counsel or advice. See more here.