Now is about the time when people start to let go of their well-intended New Year’s resolutions.

If you resolved to do a better job managing your personal finances, now is also the time to recommit and make your financial health a priority.

The average U.S. household has an alarmingly low savings of $8,000, according to WalletHub, and credit card debt of $10,263. These numbers suggest that personal fiscal management may not be a household priority.

Yet, according to a Forbes Health and One Poll survey, only 38 percent of the people surveyed say that improving their finances is a top objective for the new year. Another surprising fact: 43 percent of Americans say they save for retirement regularly, but 60% do not have an account specific to retirement, such as an IRA or 401(k). In an emergency, only 45% of Americans could pay for a $1,000 expense without needing to use a credit card or loan for assistance.

If these numbers feel similar to your own financial situation, now is the time to change your mindset to address your finances daily, as part of your routine. Managing your finances is just as important as managing your health and fitness. As we age, both financial wellbeing and physical and mental health are key to maintaining a desirable quality of life.

To help you stay on track and focused, evaluate your financial health with a personal audit. Take the time to review the following:

Net worth

Your net worth is a measure of your financial health, providing a snapshot of your current financial position at a given point in time. Whether your net worth is high or low, it is important to plan appropriately for the future. Your net worth is the basis for retirement and estate planning and helps provide insight to where the focus should be applied. For instance, you may need to prioritize eliminating credit card debt or increasing the amount you save monthly to meet your financial objectives.

Calculating your net worth sounds complicated, but for most people, it is not. Make a list of your assets (what you own). Then, subtract the liabilities (what you owe) from the assets to determine your net worth. Is your net worth positive or negative? Ask yourself why.

Calculate your net worth at least once a year and compare your current net worth to the prior year. By reviewing this data, you will see whether you are making headway. Understanding why your net worth has changed is a tool that can assist you in making sound decisions.

Budget

Most people know the amount they are paying for fixed payments, such as their mortgage or car payment, but few pay attention to the other amounts they spend monthly. Budgeting will help you understand how and where you are spending your money. It begins with tracking your income and expenses for a month, including the amount you are saving and spending on credit cards. At the end of the month, subtract your expenses from your income. Are you running at a deficit, or do you have a positive balance remaining at the end of the month?

When you are spending money, ask yourself:

—Do I really need to buy this?

—Is this expense something that I should have planned for in advance?

—Am I using a credit card because I am short on cash?

After you have tracked your expenses, monthly determine:

—How can I reduce my expenses?

—Am I maximizing my savings to meet my short and long-term financial goals?

Continue budgeting monthly, making changes where appropriate. After a little while, you will see patterns emerge. Identify categories that can be changed, such as reducing the amount you spend on groceries, limiting how often you eat at restaurants or to attend events, or cancelling unused subscriptions. Then, focus on implementing changes to improve your habits by spending less and saving more.

Big-ticket expenses

As you plan your budget, don’t forget to include large expenses that you will need to pay for in the future. Are you planning to go on a big summer vacation, buy a car, replace your roof, or buy holiday gifts for friends and family? Do you know how much these expenses will cost, and have you thought about how you will pay for them?

If the money is not readily available in your bank account, sketch a timeline, break the expense into a monthly cost, and plug this expense into your budget. For example, let’s say I need to save $10,000 for a new car by December 1st. Over the next 10 months, to accomplish my objective, I need to save $1,000 per month. Is this goal realistic? If not, I’ll need to explore other options prior to incurring the new expense.

The unexpected

Life can change quickly and unexpectedly. Are you prepared to the best of your ability for an unexpected event, such as a job loss, illness, or natural disaster? Do you have a plan in place?

Insurance and savings can help protect you against unforeseen events. But you may also incur unexpected expenses. In addition to being adequately insured, keep at least six months of expenses saved in an easily accessible account for unforeseen financial burdens. Also, store birth certificates, passports, trusts, wills, trust documents, records of home improvements, and insurance policies in a secure location that is quickly accessible in an emergency.

Retirement and investment accounts

Annually review your current investment strategies and portfolio allocation in your retirement or brokerage accounts. Does this allocation still align with your personal risk tolerance level? Are you saving enough to meet your retirement goals? As you transition through life, your investment objectives and portfolio allocation will change.

Estate planning

Without proper beneficiary designations, a trust, a will, and other basic documents, the fate of your assets and minor children may be decided by attorneys and tax agencies. Probate fees, taxes, and attorneys’ fees can erode your estate and delay the distribution of assets when your heirs may need them the most.

If your estate planning documents are not in place or are out of date, schedule a meeting with an attorney who specializes in estate planning.

Many of our current tax laws are expected to change at the end of 2025. This includes laws applicable to both income and estate tax. Ask your advisors this year how legal changes may affect your personal circumstances.

Take charge of your future by taking the time to perform an annual personal financial audit. Identify and eliminate the red flags while implementing strategies for the best financial outcomes. Do not let your New Year’s resolutions fall by the wayside. Instead, make managing your finances a predictable part of your life every day, and you can reap the long-term benefits of a sound financial future.

Teri Parker CFP® is a vice president for the Riverside office of CAPTRUST Financial Advisors and has practiced in the field of financial planning and investment management since 2000. Contact her at Teri.parker@captrust.com.