How to Step into the New Year with the Right Foot

1. Reflect on the Last Year

Living in the past is often deemed a negative trait. However, that doesn’t mean we shouldn’t learn from it and money is not an exception.

Let’s Review Spending First!

Money is not the most important thing but having it in order sure does help to sleep better at night. Determine if you set your personal or family budget well and realistically. Did you roughly spend as much as you wanted on different expense categories? Furthermore, it’s good to check if you managed to save the recommended 10-20% of your income every month, whether to create an emergency fund or for retirement.

Didn’t Have a Budget nor Tracked Your Expenses? 

In such a case, the first step would be to start tracking your expenses and create a budget for the following month. Check how much you spent on individual categories (housing, groceries, leisure, transport…). If you’re not saving regularly, try to think if you can manage to spend less on some of those categories.

Don’t worry, that doesn’t mean you should be taking out pen and paper and recording each transaction by hand. Except for cash payment, the perks of the modern age can do all this tedious work for you.

Make Technology Work for You! 

Certain banking apps already allow you to track your expenses and create budgets. Finax doesn’t lack behind and that’s why we added the Financial Coach function into our app. It automatically tracks both your income and expenses and allows for the creation of complex budgets, whether for the next month or for a specific event, such as a summer vacation.

Not sure how to create your first budget? Don’t worry, we already covered this topic in more detail in our previous blog post! 

2. Find Out Where You Can Save on Taxes, So That There’s More Left for You! 

There is a saying, that we can only be 100% sure of two things: death and taxes. But what if we could make this universal truth a little bit “easier”?  The tax season doesn’t have to be too unpleasant if you manage to lower your tax burden.

How Does It Work?

In general, you don’t pay the taxes yourself, but your employer pays them for you in the form of tax advances from your salary. The tax advance is calculated based on your income and paid to the government. Assuming your salary doesn’t change too significantly from month to month, the sum of tax advances is usually equal to the amount of tax due.   

But wait – this applies only if there’s nothing you can write off. This is the space for saving. In certain cases, it can be beneficial to fill out your taxes on your own even if the law doesn’t require you to do so.  

Check Your Expenses and Find Out Which of Them Can Be Written Off! 

There are certain expenses that can be written off. These items, of course, differ from country to country. But here are a few that are the most common:

• Pension contributions, either to local 3^rd Pillar or PEPP schemes. The maximum deductible amount varies.  
• Union membership fees. If you are a part of a workers’ union, the membership fees are often deductible.
• Charity donations. These may qualify and are usually capped as a percentage of personal income.
• Health insurance. If there is an option of supplementary health insurance in your country, the fees are often deductible.

The list of expenses that qualify as a tax write-off varies. For more detailed information, check the website of your local tax authority. It should contain all the information about the deductible expenses as well as guides on how to fill out your taxes correctly.

Each euro you save can be invested in you – whether in the form of new experiences, education, or saving for a rainy day. So why not give the government less if you can?

If you feel unsure about taxes, get in touch with an accountant or a tax advisor, to help you maximize your savings and fill out the tax forms.  

3. Set Goals and Priorities 

Whether it’s hitting the gym, saying goodbye to smoking or finally starting to learn a new language, all new year’s resolutions have one thing in common: they aim to improve our lives. But let’s be honest – who sticks to them for more than a couple of weeks?

They Can Be Approached Realistically Too! 

In case you want to turn your life around completely, take out the pen and paper I told you to keep in your drawer and write down everything that comes to mind. Don’t limit yourself, and let your thoughts flow freely.

Now choose half of the things from your list that you deem more important. Repeat the process until there are 3-4 concrete goals left.

Only Things That Matter Deserve Your Time! 

Once you’ve determined what is important, think of steps you’re going to take regularly to achieve the goal. Doing things continuously is crucial, small but consistent steps will have a much greater effect than a lot of effort in one go.

This nicely applies to saving and personal finance as well. For instance, investing in small amounts is not deemed worthwhile by many. In other words, if they can’t invest at least a few hundred a month, they don’t even give it a go. Nowadays, it's possible to start with much smaller amounts. At Finax, for example, you can start investing with only 10 euros.  

Don’t be afraid to give it a go with smaller amounts at first. You can increase the amount invested over time (when you get a raise or manage to save more). An astonishing wealth can be built even with small sums. The key is to remain consistent and invest each month. I will show you a concrete example later.

Don’t Forget About Principles and Values! 

Having concrete goals is highly beneficial, but it’s also good to have a few deeper principles/mantras to abide by throughout the year, e.g. spending more time with family.

Enter the New Year with clear goals, solid values, and patience. And remember, the will to try and improve is more important than fulfilling everything you want. 

4. Don’t Underestimate the Power of Habits!

Habits are like a powerhouse of our everyday lives – a lot of them are done so unconsciously and automatically they go unnoticed. Morning coffee, listening to your favorite songs on your way to work or checking your phone right after waking up – all of these are habits that form and influence the course of our day.  

You may’ve heard the saying that if you improve by 1% every day, you will have become a 37-times better version of yourself by the end of the year. This goes to show the power of compounding. Even a seemingly insignificant habit, such as how many sugar cubes you put in your morning tea, can have a considerable impact on your health – positively or negatively.

The power of habits and how to effectively build them is well examined in a book called Atomic Habits. If you haven’t heard of it yet, reading it can be one of your New Year resolutions.

If You Aren’t Doing So Yet, Turn Investing into a Habit! 

It wouldn’t be a Finax blog post if I weren’t to mention investing at least once, but there is a good reason for that. Investing is the most reliable way of growing your wealth and financially securing both you and your family. It’s not about the numbers in your bank account – large wealth protects you in emergencies and provides you with freedom to do things you enjoy. 

The best part is that even small amounts can eventually turn into sizeable wealth. The only catch is that you need to do it over a long period of time, ideally for entire decades. Let’s say you were to invest 75€ a month in a 100% equity portfolio for 30 years (let’s say from 25 to 55). The expected final value of your investment account would be around 100 thousand euros (the expected portfolio development is determined by Finax algorithms that use long-term historical data on stock market development).  

Try turning investing into a lifelong habit. If you’ve created a budget, the next step would be to include investing in it and treat it as yet another expense, even in smaller amounts.

We’ve examined the topic of regular investing in our previous blog post, it’s definitely worth reading! 

With Finax, investing is a piece of cake. You can open an account in just 10 minutes and start investing with as little as 10 euros. All while not being bound to regular deposits or any similar conditions.

In case of any questions, feel free to contact us at client@finax.eu or read our blog.

Disclaimer: Past results are not a guarantee of future performance, and your investment may result in a loss. Stay informed about the risks you undergo when investing. 

5. Say Goodbye to All the Things That Make You Unhappy! 

Money is, undeniably, important – it makes life easier, brings new opportunities, and poses a strong tool to achieving everlasting happiness. However, money isn’t everything. Not everything can be bought for money, and if you base your happiness solely around money, you will never be able to get enough of it – because you can always have more money.

Don’t Forget to Take Care of Your Soul Too! 

2025 can truly be your year if you decide to do something for your inner happiness. We often focus only on the things we need to do but forget about those that fulfill us and make us happy. So, pause for a while, take a breath and ask yourself: What makes me happy? What sets me back? 

Start by identifying things that hold you back:

• Is your work smothering you? Maybe it’s time for a new job, or perhaps, to finally try executing that business idea that’s been on your mind for some time.
• Do people around you suck out all the energy from you? Learn to set boundaries and surround yourself with those who support you.
• Holding on to material stuff that doesn’t make you happy and just clutters the space? Consider if it wouldn’t be better to invest your money and time in experiences and memories instead. 

Ironically, such an approach can help you get your finances in better shape. For example, if you manage to reduce your spending on useless material possessions, investing and saving will become much easier. This approach is called financial minimalism, and we examined it in a past blog post too.

If you surround yourself with unsupportive and exploiting people, it will be harder to grow even with a good plan and habits. So don’t forget to surround yourself with the right people.

Invest in What Makes You Truly Happy! 

Try to focus your energy on experiences and meaningful moments. Instead of chasing material things, invest in traveling, reading, learning, or moments with friends and family. Instead of holding on to the past, try something new to propel yourself forward.

The Year 2025 Is in Your Hands 

Team Finax hereby wishes you a happy and successful New Year. Let it be better than the last one and worse than the next one!

This article provides marketing information about the products of Finax, o.c.p., a.s.