The start of a new year offers something powerful: a clean financial slate. Whether your goals in 2026 include building savings, reducing debt, investing more intentionally, or simply maintaining spending discipline, the first quarter of the year is one of the most impactful time to put a plan in motion. With inflation moderating, wage growth stabilizing, and interest rates potentially trending down in 2026, many households will have an opportunity to strengthen financial foundations.
The State of Household Financial Health Going into 2026: According to the Federal Reserve’s latest Survey of Household Economics and Decision making (SHED), 73% of U.S. adults say they are “doing okay financially,” yet 37% still struggle to cover a $400 emergency expense without borrowing or selling something — a reminder of why budgeting and saving continue to matter.¹ Meanwhile, U.S. credit card balances reached a record $1.23 trillion in late 2025, according to the New York Federal Reserve.² With high borrowing costs and rising living expenses still affecting many households, strategic planning is more important than ever.
- Tip 1: Build a Realistic and Flexible Budget: A budget isn’t just about restriction — it’s about awareness. Start by reviewing your 2025 spending using bank or budgeting apps (like Mint, YNAB, or Empower) and categorize your expenses. Consider adopting a 50/30/20 framework or its variations:
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- 50% needs (housing, food, insurance)
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- 30% wants (dining, entertainment, travel)
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- 20% savings/debt payoff
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- Research shows that people who use written budget systems are significantly more likely to meet their financial goals.³ Setting automatic transfers into savings and investment accounts can help keep your plan on track without constant effort.
- Tip 2: Make Savings Automatic & Goal-Based: Don’t just “save what’s left.” Instead, treat saving like a bill you owe yourself. Setting automatic deposits into a high-yield savings account, Roth IRA, or taxable brokerage account helps reduce the temptation to spend. Setting named goals — like “Paris trip,” “Emergency fund,” or “New Home Fund” increases motivation and follow-through.
- Tip 3: Prepare for Large 2026 Expenses Now: Think ahead to predictable costs like:
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- Property taxes
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- Insurance renewals
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- Tuition/education
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- Holiday travel
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- Medical/dental expenses
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- Major life events (weddings, moves, childcare)
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- Setting aside monthly sinking funds can prevent panic and credit card debt later in the year.
A budget is not a restriction, it’s a roadmap for freedom. By using January to reset your spending, prioritize saving, and align your finances with your values, you’ll set the tone for success not only in 2026, but for the years beyond. Your Wedbush Financial Advisor can help you build a plan, track progress, and make the most of opportunities in the current rate and market environment.
Sources:
[1] https://www.federalreserve.gov/consumerscommunities/shed.htm
[2] https://www.newyorkfed.org/microeconomics/hhdc
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