Here Are the Most Important & Timely Financial Planning Considerations for the New Year to Work on Right Now

Life By Design 360 with Doug Reed

Today is all about something every single one of us needs to take seriously: financial planning for the new year.

Now, I know financial planning can feel boring or maybe overwhelming, especially if you’ve just been laid off, you’re between jobs, or you’re looking to level up your career.

But here’s the truth: the end of the year is the perfect time to re-assess. You get to take stock of where you’ve been, set intentions for where you want to go, and make sure your money is aligned with your goals.

In today’s episode, we’re covering:

• Budgeting and savings plans for the year ahead.
• Retirement planning with real examples based on the average U.S. household income of $90,000.
• Insurance planning—health, life, disability, auto, home, and umbrella coverage.
• Estate planning basics, even if you think you’re “too young” to worry about it.
• And why this season is the perfect moment to reset and take control, whether you’re traditionally employed or navigating a job transition.

So grab a notebook, because today is going to be both practical and eye-opening.

 

Budgeting & Savings

Let’s start with the foundation—budgeting.

Think of your budget as your financial GPS. Without it, you’re just driving blind. A good rule of thumb is the 50/30/20 rule:

• 50% of income to needs,
• 30% to wants,
• 20% to savings and debt reduction.

On a $90,000 annual income—that’s $7,500 per month:

• About $3,750 for housing, groceries, transportation, and insurance.
• $2,250 for lifestyle spending—entertainment, travel, hobbies.
• $1,500 for savings and debt.

Now, the savings piece is critical. Even if you’re between jobs, saving something—$100, $200, $300 per month—keeps the habit alive. Think of savings like paying yourself first. If you can automate it, even better. It’s easy to do through your bank, brokerage or ask your advisor.

An emergency fund should cover 3 to 6 months of expenses. If your monthly spend is $5,000, your target emergency fund is $15,000 to $30,000. This is what gives you confidence and breathing room when unexpected challenges hit.

 

Retirement Planning by Decade

Now let’s talk about retirement savings. This is where age really matters.

Using a $90,000 average income which is pretty close to U.S. incomes, let’s walk through examples by decade:

• 20s:
  Start early! Even saving just 10% of your salary ($9,000 a year) in a 401(k) or Roth IRA can grow massively. If you start at 25 and earn 7% annually, by age 65 you’ll have around $1.3 million.
• 30s:
  By now, you should aim to have at least 1x your salary saved. On a $90,000 income, that’s $90,000 by age 30–35. If you haven’t started yet, it’s okay—but this is the decade to turn it on. Bump contributions to 12–15% if possible.
• 40s:
  Target here is 3x your salary saved—around $270,000. This is often when life expenses are high—kids, mortgage, college. But don’t let retirement savings slide. Increase contributions when raises or bonuses come in.
• 50s:
  By now, aim for 6x your salary saved—$540,000. The good news? The IRS allows “catch-up contributions.” In 401(k)s, that’s an extra $7,500 a year beyond the $23,000 annual limit. If you’re self-employed, SEP IRAs or Defined Benefit Plans allow you to save even more—sometimes $50,000–$100,000 a year.

The key takeaway? It’s never too late, but the earlier you start, the less you have to save. Time and compounding do the heavy lifting for you.

 

Insurance Planning

Next up, Insurance: Insurance is one of those areas people ignore until it’s too late. Let’s break it down:

• Health Insurance: If you’re employed, review your plan’s deductibles, out-of-pocket maximums, and HSA eligibility. If you’re between jobs, look into COBRA, Affordable Care Act exchanges, or even short-term coverage.
• Life Insurance: If others depend on your income, term life insurance is usually the best choice. For someone earning $90,000, a common guideline is 10x income—so about a $900,000 policy.
• Disability Insurance: Your ability to earn an income is your biggest asset. A long-term disability policy can replace 60% of your income if you can’t work.
• Car & Home Insurance: Review deductibles and liability limits. A $250,000 liability limit might not be enough if you cause an accident.
• Umbrella Coverage: For as little as $200–$300 a year, an umbrella policy adds $1–$2 million in liability coverage on top of your car and home policies. Think of it as peace of mind against lawsuits or major claims.

This is not the fun part of financial planning—but it’s what protects everything else you’ve built.

 

Estate Planning

Now, even if you’re young, single, or just starting out—you need at least basic estate planning.

At minimum, have:

• A will to state where your assets go.
• A healthcare proxy and power of attorney so someone can act on your behalf if you’re incapacitated.
• Beneficiary designations updated on your 401(k), IRA, and life insurance.

If you’re in your 40s or 50s and building significant wealth, consider a revocable living trust to simplify probate and provide privacy.

Estate planning isn’t about death—it’s about control and clarity. It makes things easier for the people you love.

 

Why the End of Year Matters

So why is this season—the end of the year—so important?

Because it’s the natural reset point. You can:

• Make last-minute retirement contributions for the tax year.
• Review your insurance coverage before renewals kick in January 1st.
• Adjust your withholding, tax planning, and charitable giving.
• Reflect on what worked financially this year—and what didn’t.

If you’re employed, this is the time to take advantage of open enrollment and adjust retirement contributions. If you’re in between jobs, this is the moment to set a plan for savings, coverage, and rebuilding income streams.

 

Pulling It All Together

Financial planning doesn’t need to be complicated—but it does need to be intentional.

• Budget to know where your money is going.
• Save consistently, no matter your stage of life.
• Protect yourself with insurance.
• Secure your future with retirement accounts.
• Protect your family with estate documents.

And remember, this isn’t just about numbers—it’s about peace of mind, freedom, and designing life on your terms.

 

As we step into the new year, the most powerful thing you can do is be proactive. Don’t let your money happen to you—make your money serve your life’s vision.

Tomorrow, I’m going to show you how to build a side hack into a business and an income you can’t get ever get fired from. Maybe you could make more than the boss you’re leaving behind. Maybe a lot more.

 

If you’ve been laid off or in between jobs or just unsatisfied with the job you’ve got, be sure to go to life by design 360.com and subscribe.

Each week you’ll get important updates on new podcasts that can help you get the job you want now, create a side hack and an income that you can never get fired from and get on the fastest path to retirement success and financial freedom.

Also, you’ll be the first to know about openings in our LifeByDesign360 Insider Academy and Community. There you’ll find all the coaches, the courses, the resources and an amazing community of people going through what you’re going through, who are utilizing the tools for maximum success.

I’m Doug Reed, and this has been Life By Design 360 Wealthy Wednesday edition. If this content helped you, share it with someone who could use a reset.

And if you’re ready, take one small step this week—review your budget, increase your savings by even 1%, or schedule that meeting with your advisor.

Because your best life isn’t built by accident. It’s built by design.