A new year gives you a fresh opportunity to get your financial house in order. January is when most of us are thinking about goals and resolutions anyway, so why not channel that energy into moves that actually strengthen your money situation?<\/p>\n
The truth is that small financial adjustments made early in the year tend to have the most significant impact. Whether you’re finally switching to a better savings account, reviewing what you’re paying for insurance or making sure your investments still match your goals, these tweaks compound over time. By the time December rolls around, you’ll see the difference.<\/p>\n
Here are seven strategies to prep your finances for 2026.<\/p>\n
1. Dust off your savings with higher rates<\/p>\n
How much are you currently earning on your savings account balances? If you bank with institutions like Bank of America, Wells Fargo or Chase, there\u2019s a chance it\u2019s not much more than the 0.39% national average APY \u2014 or less.<\/p>\n
But with interest rates still strong, now could be the perfect time to tidy up your earning potential with higher savings rates.<\/p>\n
Digital and online banks offer high-yield savings accounts (HYSAs) that earn well over 4.00% APY. These banks are FDIC-insured<\/a> and just as safe as the banks in your neighborhood. But because they have lower overhead costs, they\u2019re able to reward savers with much higher rates<\/a>.<\/p>\n Let\u2019s say you have $20,000 in savings:<\/p>\n At 0.01% APY. You’d earn only about $2 after one year.<\/p>\n At 4.00% APY. That same $20,000 could grow by $800 after one year.<\/p>\n That’s an extra $798 with no additional effort \u2014 simply by moving your money to a better account.<\/p>\n Making this one simple switch could drastically increase your savings growth and help you reach your goals with a larger nest egg. It’s a smart, easy way to freshen up your finances and set yourself up for a more secure future.<\/p>\n To take advantage of high savings rates, consider putting a part of your nest egg in a high-yield savings account or money market account<\/a>, which offers access to your money that\u2019s similar to a traditional account. Or lock in today\u2019s high rates with a certificate of deposit<\/a> offering strong fixed rates on terms of a year or longer.<\/p>\n Look for accounts with no or low minimum balance requirements, monthly maintenance or other common banking fees<\/a>.<\/p>\n \ud83d\udca1 Expert tip: Don’t let perfect be the enemy of good. Even if you don’t get the absolute highest rate, moving from 0.01% to even 3.50% APY will result in significantly higher returns over time \u2014 especially when you account for daily or monthly compounding<\/a>.<\/p>\n Dig deeper: Here’s how my high-yield savings continues to beat inflation and traditional banks<\/a><\/p>\n 2. Shop around for new insurance<\/p>\n Your insurance needs usually shift as you age. For instance, you may need less life insurance if you\u2019re mortgage-free or your kids have left the nest. Or you might want long-term care insurance to protect your wealth from unexpected medical costs down the road.<\/p>\n As you review your finances, take a moment to review your insurance policies and shop around for new ones:<\/p>\n Gather your current insurance policies \u2014 those for auto<\/a>, health, life, homeowners<\/a> and any other coverage.<\/p>\n Review your coverage, deductibles and premiums for each policy, and identify any gaps or redundancies in your coverage.<\/p>\n Compare quotes from insurance providers online. Find policy costs for each of your coverage needs to see if you can get better rates or stronger coverage.<\/p>\n Consider the insurer\u2019s reputation, customer service and financial stability to narrow down your options.<\/p>\n Switch providers or update your current policies if you find a cheaper deal or better coverage elsewhere.<\/p>\n \ud83d\udca1 Expert tip: Insurance companies are known to raise rates for existing customers over time \u2014 but many don’t shop around before renewing their policy at a higher rate. Taking just 30 minutes to compare quotes and switch your auto insurance<\/a> could save you hundreds.<\/p>\n Dig deeper: When\u2019s the best time to shop for car insurance? (Hint: It could be right now)<\/a><\/p>\n 3. Refresh your investment strategy<\/p>\n It’s a good time to review your investment strategy and make sure it’s growing your money efficiently while aligning with your priorities and goals.<\/p>\n Stick to your long-term strategy with thoughtful adjustments based on evolving money goals, life changes \u2014 like marriage, retirement or a new career \u2014 and shifts in your financial situation. Remember that even small regular investments compound significantly over time: $200 monthly invested with a 7% average annual return can grow to more than $100,000 after 20 years.<\/p>\n Here are a few areas of your investment to consider:<\/p>\n Review your investment performance against relevant benchmarks. For example, if you own an S&P 500 mutual fund<\/a>, compare its performance to the actual S&P 500 index.<\/p>\n Reassess your investment time horizon. Has it changed since you originally invested? If retirement approaches within the next five years, you might want to shift toward low-risk investments<\/a>.<\/p>\n Check your investment fees. Even small differences in expense ratios make huge differences over time. For instance, a 1% difference in fees on $100,000 invested over 20 years could cost you more than $50,000 in potential returns<\/a>.<\/p>\n Consider tax-efficient investing strategies. Such as maximizing contributions to tax-advantaged accounts like Roth IRAs<\/a> and 401(k)s<\/a> before investing in taxable accounts.<\/p>\n Leverage tax-loss harvesting on taxable investments. This strategy involves selling investments that are down to offset capital gains taxes on your winning investments.<\/p>\n If your portfolio has drifted from your target allocation, consider rebalancing. For example, if your ideal mix is 60% stocks and 40% bonds but it’s shifted to 70% stocks and 30% bonds as a result of market changes, selling some stocks and buying bonds can return you to your target allocation.<\/p>\n \ud83d\udca1 Expert tip: While it’s possible to harvest your losses and rebalance on your own, it’s helpful to use a platform that automatically rebalances your investments for you. Or meet with a trusted financial advisor<\/a> who can help you adjust your asset allocation to match your risk tolerance and retirement goals.<\/p>\n Dig deeper: How I started investing with just $100 \u2014 and why you shouldn’t wait<\/a><\/p>\n 4. Balance out riskier investments with guaranteed returns<\/p>\n Today’s certificates of deposit are still offering high returns, even after recent Fed rate cuts. But with further cuts anticipated in 2026, right now is an excellent time to consider locking in the fixed rates of a CD.<\/p>\n Here’s why CDs make sense right now:<\/p>\n Rates are elevated. You can find many digital banks and online accounts paying out more than 4.00% APY across various terms.<\/p>\n Your rate won’t change. Once you lock in your term, your rate is fixed until your term’s maturity \u2014 even if ongoing rates for new CDs fall.<\/p>\n You can ladder CDs for flexible returns. Building a CD ladder<\/a> allows for rolling returns while leveraging today’s highest rates.<\/p>\n \ud83d\udd0d What is a CD ladder?<\/p>\n A CD ladder is a savings strategy that spreads your initial deposit across a series of terms with staggered maturity dates for more regular access to your money.<\/p>\n Let’s say you have $20,000 to deposit. Instead of putting all that money into one long-term CD, you’d spread it across a series of CD terms:<\/p>\n As each CD matures, you can either cash out the money or roll it into a new term<\/a>, adding a new rung to the end of your ladder.<\/p>\n \ud83d\udca1 Expert tip: When shopping for CDs, don’t limit yourself to your current bank. Online banks and credit unions typically offer much higher rates than traditional banks \u2014 sometimes by more than a full percentage point.<\/p>\n Dig deeper: How do CDs work? 7 types for boosting your savings<\/a><\/p>\n 5. Prepare for the tax season<\/p>\n Tax season will be here before you know it, so now’s the time to get your documents in order before the filing rush begins.<\/p>\n A proactive approach to tax prep can help you avoid last-minute scrambling and potentially uncover deductions or credits you might otherwise miss.<\/p>\n Here’s how to set yourself up for a smooth filing season:<\/p>\n Review your tax withholdings. Use the IRS withholding calculator<\/a> to make sure you’re not paying too much or too little \u2014 and make adjustments, if you are. If you received a large refund last year, reduce your withholding on your W-4 to put more money back in your paycheck.<\/p>\n Organize your tax documents. Create digital or physical folders for receipts, charitable contributions and business expenses, and keep track of your medical expenses, education costs and investment documents.<\/p>\n Review potential tax credits. Learn about tax benefits you might qualify for, such as those for education, energy-efficient home improvements or qualifying dependents.<\/p>\n Declutter old tax documents. Experts advise holding on to your tax returns for at least seven years, but you can dispose of receipts and other supporting documents within three years, generally.<\/p>\n Take advantage of tax-advantaged accounts. Aim to max out retirement accounts, HSAs or 529 college savings plans to reduce your taxable income.<\/p>\n Consider meeting with a CPA or other credentialed expert early in the year to discuss tax strategies specific to your income, investments and lifestyle. Getting professional guidance before you file can help you spot opportunities to lower your tax bill.<\/p>\n \ud83d\udca1 Expert tip: If you’re self-employed, own your own business or otherwise don’t have income tax withheld from your paychecks, you may need to pay quarterly estimated taxes to the IRS<\/a>. A good rule of thumb is to set aside 25% to 30% of each payment you receive in a savings account to cover quarterly tax obligations due the 15th of April, June, September and January, depending on the year.<\/p>\n Dig deeper: Our editorial picks for the best free and premium tax software to maximize your return<\/a><\/p>\n 6. Update your estate plan<\/p>\n Updating your estate plan \u2014 or creating one \u2014 is another key step in preparing your finances for the new year. An estate plan makes sure your assets are managed and distributed the way you want, potentially reducing taxes and legal fees for your loved ones.<\/p>\n Review these five main parts of a healthy estate plan, updating as needed:<\/p>\n Will and testament. Your will should clearly state how you want your assets divided and designate a person in charge of carrying out your wishes.<\/p>\n Trust. A trust helps you manage your high-value assets and estate according to your specific instructions after you die.<\/p>\n Beneficiaries. Check and update who you’ve named as beneficiaries on your retirement accounts, life insurance and other assets to make sure they match your current wishes.<\/p>\n Power of attorney. Choose a trusted person or agent to make financial and legal choices for you if you can’t do it yourself.<\/p>\n Healthcare directive. Living wills and healthcare directives are legal documents that outline your medical preferences and appoint a person to make care decisions on your behalf when you’re not able to.<\/p>\n \ud83d\udca1 Expert tip: Did the year bring major life changes like marriage, divorce, births or deaths in the family? Don\u2019t forget to update your estate plan accordingly. Talk to an estate-planning attorney or a trusted financial advisor to ensure your documents are legally sound.<\/p>\n 7. Inventory your assets and liabilities<\/p>\n Creating an inventory of everything you own and everything you owe is an important step in organizing your finances, especially as you plan for or approach retirement.<\/p>\n \u2705 Assets can be personal property \u2014 like your home, vehicles, art, valuable collectibles and jewelry \u2014 or accounts, like your bank accounts, brokerage accounts and retirement accounts.<\/p>\n \u2705 Liabilities are your debts, such as mortgages, car loans, credit card balances and any other money you owe.<\/p>\n You can create a financial snapshot in five steps:<\/p>\n Make a list of your assets and their current values. For property and vehicles, use online resources or recent appraisals to estimate their worth.<\/p>\n Make a list of all your liabilities and the current balance owed.<\/p>\n Organize these lists in a spreadsheet or a legible document.<\/p>\n Store the inventory securely in a safe deposit box or with your estate planning documents, and let your loved ones know where to find it.<\/p>\n Update your list quarterly or annually as your assets and liabilities change.<\/p>\n \ud83d\udca1 Expert tip: Having this snapshot helps you gauge progress toward your financial goals and identify areas for improvements, such as increasing your savings or paying down credit cards<\/a> or other high-interest debt. It\u2019s also incredibly useful for your loved ones in case of an emergency.<\/p>\n Dig deeper: Best budgeting apps for 2025: $0 and low-cost ways to track and monitor your money<\/a><\/p>\n Other stories you might likeAbout the writers<\/p>\n Cassidy Horton<\/a> is a finance writer who specializes in banking, insurance, lending and paying down debt. Her expertise has been featured in NerdWallet, Forbes, MarketWatch, CNN, USA Today, Money, The Balance and Consumer Affairs, among other top financial publications. Cassidy first became interested in personal finance after paying off $18,000 in debt in 10 months of graduation with an MBA. Today, she’s committed to empowering people to stand up and take charge of their financial futures.<\/p>\n