How to Build Wealth in 2025
Don’t wait until after the New Year begins!
As the new year approaches, now is the perfect time to take control of your finances and lay the groundwork for a prosperous future. If you wait to begin this until the New Year begins, you’ll be behind already! These five strategic money moves can help you build wealth, reduce financial stress, and align every dollar with your short and long-term goals.
Over the next five weeks, we will be releasing detailed articles on each of the five following steps to building wealth in 2025. In this article we will summarize our strategy, to give you an idea of the strategy.
1. Conduct a Financial Audit
Start by diving deep into your financial situation. Log into all your accounts—checking, savings, credit cards, loans, and investments. If you’ve forgotten passwords, take the time to reset them and securely store this information for the future for easy access.
Next, write down all your numbers in one place. Organize them into two categories:
Assets: Include your savings, investments, car, home, and any other valuable property.
Debts: List credit card balances, student loans, mortgage amounts, and other places you owe money.
Once you have a complete financial picture, analyze your spending habits by reviewing recent transactions over the last 90 days.. Identify wasteful spending, forgotten subscriptions, and overcharges, and correct these as soon as possible.
Finally, check your credit score using a free service like Credit Karma to monitor your credit health and spot any signs of fraud.
2. Create a Zero-Based Budget
A Zero-Based Budget is a method of assigning every dollar a job- using intentionality to spend your money with a standardized plan. This budgeting method ensures that every dollar of your income is assigned a purpose, whether it’s for bills, savings, investments, or fun. With income minus expenses equaling zero, you’ll avoid overspending and have a clear plan for reaching your goals.
At Align, we teach our clients to utilize credit cards for ALL spending that can go on credit. When using credit correctly, it buys you a 30-day delay from when you spend money to when you actually have to pay those expenses off on the card. This allows for us to be able to make adjustments in your budget month-to-month when the unavoidable emergency happens.
3. Determine Where You Are in Your Financial Progress
At Align, we created an algorithmic approach to managing money that we believe applies to all. Most people try to accomplish many financial goals at once while failing to accomplish any. Instead, focus every extra dollar on a singular goal in a step-by-step fashion.
Below are the Three Align Money Goals and the order in which to accomplish them:
Starter Emergency Fund
Save $1,000 in a High-Yield Savings Account (HYSA) at Vanguard.com
Purpose: Cover small emergencies and avoid using debt.
Pay Off Consumer Debt
Eliminate all debt except your mortgage (credit cards, loans, etc.).
Purpose: Free up money and reduce financial stress.
Fully Funded Emergency Fund
Save 3–6 months of expenses in your HYSA at Vanguard.com
Purpose: Provide financial security for major life events.
If you have already accomplished these, your current #1 Money Goal depends on your individual situation. Some examples of what could come next could be the following: Saving for a home down payment, saving for kid’s college, or investing for early retirement. Align Money Mastery can help you accomplish all of these major milestones.
4. Open a Taxable Brokerage Account at Vanguard
To make your idle cash work harder, open a taxable brokerage account at Vanguard. While traditional savings accounts offer minimal returns, a taxable brokerage account at Vanguard provides access to the highest interest percentage available at any current time. You should keep every dollar that you’re not using in the next 30 days at Vanguard. Transfers back to your checking account are completed in 1-2 business days with no fees, transfer costs, or minimum balance requirements.
In doing this, there is now no need for a traditional savings account. As of the writing of this article, the national average savings account interest rate is under 0.50% yearly. The current Vanguard Savings interest rate is 4.58%. There is absolutely no feasible reason to have even one dollar in a Traditional Savings Account- if you do, you're losing money every single day.
5. Invest in Financial Education
Your financial success depends on your ability to make informed decisions. Just like working to live a healthy lifestyle by learning about nutrition and exercising regularly, financial health is not something that happens by accident.
Building and maintaining a budget, avoiding high interest debt, saving cash for emergencies, practicing good credit hygiene, and investing for retirement are all ways you can achieve long term financial health. Partnering with a Personal Finance Coach is a way to help teach you how to manage these goals while living a fulfilling life.
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Building wealth in 2025 starts with taking small, intentional steps starting today. By conducting a financial audit, budgeting effectively, focusing on one goal at a time, leveraging a Vanguard brokerage account, and investing in your financial education, you’ll set the stage for lasting financial success. Stay tuned for detailed articles on each of these steps in the coming weeks!