By Melissa Forte-Litscher
As we welcome a new year, it’s a great time to reflect on our financial goals and set ourselves up for success. Whether you’re focusing on personal financial planning or navigating the tax implications of buying or selling a home, a little preparation can go a long way. Here are some tips to help you start the year on the right foot.
To plan the upcoming year’s financial strategy, we have to start by assessing where we stand. Review income and expenses to see where your money goes each month. Look at any debts you owe and prioritize paying down high-interest ones. Don’t forget to check your credit score! A healthy credit score can make a big difference, especially when it comes to securing a mortgage or refinancing.
Think about what you want to achieve this year when you begin to set your financial goals. Maybe it’s saving for a down payment on a home, building an emergency fund, or paying off credit card debt. Setting a budget is very important. A budget isn’t just a plan—it’s your financial roadmap. Break down your expenses, look for areas to save (those daily coffee runs can add up!), and make sure to allocate funds toward your goals. Apps and online tools can help make budgeting a breeze.
Don’t forget to set up your emergency fund, because life happens, and these funds can keep unexpected expenses from derailing your plans. Aim to save three to six months’ worth of living expenses so you’re covered if something comes up.
If you’re not already investing, now’s a great time to start planning for your future. Look into retirement accounts like 401(k)s or IRAs and consider diversifying your investments to build long-term wealth. If you’re unsure where to begin, a financial advisor can point you in the right direction.
Tax Preparation is an integral part of your financial plans and homeownership can present opportunities for savings. But, it’s important that your documentation is complete and correct to maximize your benefits.
If you’ve purchased a home this past year, congratulations! Make tax time easier by organizing these key documents:
• Closing Statement (HUD-1 or Closing Disclosure) which details the final transaction, including your closing costs.
• Mortgage Interest Statement (Form 1098) shows the deductible mortgage interest you’ve paid.
• Property Tax Records so you don’t miss out on deductible property taxes. Receipts for Home improvements that might increase your home’s value and help reduce taxes when you sell in the future.
If you’ve sold a home, congratulations to you, too! Make sure to save:
• Closing Statement and Sales Contract which is essential for reporting your sale.
• Receipts for Major Repairs or Improvements because these might reduce your capital gains tax.
• Records of Sale Expenses, which include Real estate commissions, advertising costs, and other fees which may be deducted from your gains.
Staying organized with these documents will help you maximize your deductions and reduce stress when filing taxes. Be sure to check with your own accountant to see if these apply to your personal situation and perhaps find additional areas in which to save.
Financial planning isn’t “set it and forget it.” Revisit your goals and budget monthly to make sure you’re staying on track. And, be sure to share with your spouse, partner or even a trusted friend for accountability. Whether you’re focusing on your finances, planning to buy or sell a home, or simply dreaming about your next move, let’s make 2025 count in a positive way. If you have questions about real estate, I’m at your service and ready to help you make this a year of success, growth and smart decisions!
