The start of a new year is a natural time to reset—not just your goals and habits, but your finances, too. Whether the holidays stretched your budget or the year ahead feels full of new financial priorities, January presents the perfect moment to take stock, regain control, and set yourself up for success.
1. Get the Full Picture
Before you can build a realistic cash flow plan, take stock of your current situation. Start by gathering:
- Recent pay stubs and bank statements to understand your income and spending trends.
- Retirement savings details, including employer contributions and match percentages.
- Employer stock plans, if applicable—know when shares vest and how they factor into your overall financial plan.
Understanding where you are today will help you make informed decisions moving forward.
2. Recalibrate Your Spending for the Year Ahead
Think of January as a financial reset button. Take time to:
- Revisit your budget: Does your current spending align with your priorities? Adjust as needed to ensure savings and essentials are covered first.
- Identify quick wins: Look for discretionary spending you can trim—unused subscriptions, impulse purchases, or dining out that can shift back to home cooking.
- Build in flexibility: Unexpected costs will arise, so leave room for the “unknown” and maintain an emergency fund.
- Outline how much you plan to save monthly or quarterly and use that as your benchmark.
- Break goals into categories: short-term (like a vacation), medium-term (home relocation), and long-term (retirement).
- Check in regularly—monthly or quarterly—to ensure you’re on track and adjust if needed.
Small, consistent savings habits will build momentum and help you reach those big milestones.
3. Automate Your Plan
One of the simplest ways to stick to your cash flow goals is by automating the process:
- Automatic savings: Set up transfers to your investment or savings accounts—directly from payroll or via tools like MoneyLink.
- On savings: Know what you are targeting for savings (short-term goals and emergency fund) and invest the rest.
- On investing: Make sure what you are investing in is aligned with your goals.
- Automatic spending: If you’re in retirement, schedule predictable withdrawals to manage living expenses seamlessly. Consider it your “portfolio paycheck”.
- Simplify with technology: Use tools like RightCapital to track your financial plan in one place or budgeting apps like Mint for a snapshot of your cash flow.
Automation removes guesswork and helps you follow through on your plan without effort.
4. Plan for Large Cash Inflows
If you receive a bonus, employer stock vests, or another significant cash inflow at certain points in the year, make a proactive plan for those funds:
- Allocate a portion toward your savings or investment accounts.
- Pay down any lingering debt or higher-interest balances.
- Consider reserving funds for upcoming large expenses to avoid dipping into savings later.
Preparing for these moments in advance can maximize their impact and keep your plan on track.
5. Regularly Monitor Your Progress
Financial plans are dynamic, not static. As life changes, your plan should evolve, too:
- Schedule regular conversations with your advisor to review your progress.
- Adjust your plan as needed for changes in income, expenses, or financial priorities.
Ongoing check-ins ensure your cash flow plan remains sustainable and aligned with your goals throughout the year.
6. Set Yourself Up for a Confident Financial Year
January is a chance to hit reset and align your cash flow with your broader financial plan. By understanding your circumstances, automating savings, and monitoring progress, you’ll create a system that supports both your short-term needs and long-term goals.
Looking for guidance tailored to your unique situation? Your Freestone Client Advisor can help you build and implement a sustainable cash flow plan—so you can approach the year with clarity, confidence, and purpose.
Important Disclosures: This article is not intended to provide, and you should not rely upon it for, accounting, legal, tax or investment advice or recommendations. We are not making any specific recommendations regarding any financial planning, investment or tax strategy, and you should not make any financial planning, investment or tax decisions based on the information in this article. This article is intended to be educational in nature and to discuss a few limited aspects of very complex legislation or other complex subject matters. This article is not a comprehensive or complete summary of considerations regarding its subject matter. We recognize that every individual has different needs and the opinions expressed in this article may not be appropriate for everyone. Please consult with a Freestone Client Advisor, accountant, or lawyer regarding options specific to your needs. Please note that Freestone does not approve or endorse any third-party content hyperlinked to in this article.
About the Author: Courtney Hastings, CFP®
Courtney is a Director and Client Advisor at Freestone and has been with the firm since 2018. She started her career in banking as a commercial underwriter but always had an interest in wealth management and wanted to shift to a career where she could use both her desire to connect with people and her finance background. She is passionate about helping families with financial planning through each stage of life and bringing together their whole financial picture through cohesive investment management. Courtney acts as her client’s advocate and provides advice around financial decisions to help them achieve their goals.