Financial health and wellness—a reality checkup for the new year

Your finances

Want better financial health in the year ahead? Focus on these four things.


Angie O'Leary
Head of Wealth Planning
RBC Wealth Management–U.S.

As you think about new resolutions, new habits and new goals you want to set for the new year, “wellness” in some form is likely on your list. Whether it’s physical, mental or financial health, the COVID-19 pandemic motivated many people to focus on taking better care of themselves and those they love.

One way to define wellness is “the act of practicing healthy habits on a daily basis to attain better physical, mental and financial outcomes.”

In order to make healthy choices, you first must assess where you are at. From a financial health standpoint, that means taking a look at your full financial picture and checking to see if you are tracking toward your goals. What are your saving and spending rates? And where do your equity and credit levels sit? Once you have taken the pulse on these financial vital health signs, you can perform a more comprehensive exam guided by the following four pillars of good financial health. This will help you focus on what needs your attention in the new year.

1. Accumulate and grow your wealth

From having an emergency fund to developing various ways to save for the future, it’s important to focus on achieving long-term financial health. Tax-advantaged accounts, including a Roth 401(k) and a Health Savings Account (HSA), are smart savings tools for almost everyone.

As you step through life’s stages, there will be opportunities to accelerate wealth building through events such as homeownership, inheritance, liquidation events and income spikes. Remember that diversifying your sources of wealth and being smart about market risk will build financial resilience.

Investing with a greater purpose might be a new financial wellness goal. Taking a values-based approach to your finances, including your investments, will help you stay more connected with the purpose and meaning of your wealth. Evaluating the health of the companies you invest in through an environmental, social and governance (ESG) lens can help you make investment decisions that you can not only feel good about, but also are likely to perform better long term.

2. Fund your lifestyle today and tomorrow

Spending within your means and staying away from unnecessary debt are two important daily habits to adopt. That’s because how you think about spending needs today plays into future lifestyle choices. Focus on essential versus discretionary spending and, if possible, save for big-ticket purchases like a car or a vacation. Planning ahead to make sure your essential needs are always covered should be a top priority. Keeping an eye on your credit score and using credit wisely are also two important financial routines.

Once you are nearing retirement, examining the sources of secure income available to fund your essential expenses should be a part of your routine wellness check. This requires a view into the future and an understanding of the impact of the market, inflation, taxes, interest rates and other risks that might affect your plan, and how the impact changes as you age.

Understanding how inflation and taxes will impact your nest egg is increasingly important. Your financial advisor can help you understand what your retirement paycheck will look like, including the impacts of inflation and estimated taxes. They can also help you understand your Social Security options and help you evaluate if a Roth conversion or an annuity might be a helpful strategy to consider.

3. Protect what is important to you

Protecting your family and your wealth during your working years is foundational to sustaining that wealth throughout your lifetime. Having an appropriate level of insurance, including property and casualty insurance, should be at the top of the list of financial preventative care, but life insurance is another important protective measure to take. Many employer benefit plans provide basic coverage, which is helpful in the short term. However, once you have a family and your income and estate grow, you will likely want more portable and permanent insurance.

As you age and your wealth grows, it is important to revisit the purpose and amount of coverage for your insurance, as well as explore other important considerations, including preserving your wealth for the next generation. Baby boomers, in particular, would benefit from an insurance review as the level of wealth and life circumstances at play when they first signed up for their insurance likely have changed in the years—or decades—since.

4. Create a lasting legacy

Tackling estate essentials is another financial health “to-do” that everyone should prioritize, regardless of age or wealth. Establishing key estate documents, including a current health care directive, will and power of attorney, are important first steps. It’s also critical to make sure your assets are properly titled and beneficiary designations are made.

The threat of a lower federal estate tax exemption has put many investors on high alert. Regardless of what happens with the legislative agenda, we do know the current high federal estate and gift tax exemption of $13.61 million per individual for 2024 is set to sunset on Dec. 31, 2025, and likely to revert back to an inflation-adjusted level of $5 million per individual in 2026. With the growing wealth of the baby boomer cohort, many more families will find themselves with a taxable estate. Getting ahead of this timeline with a confident estate plan should be a priority.

Gifting is often part of our legacy plans and is frankly way more rewarding to do while you are alive so you can witness the impact you are making. Whether you are gifting to your kids to help them get their first house, starting a college fund for the grandchildren or providing a meaningful gift to an important cause, gifting should be part of your wellness checkup. Research tells us that being generous and spending money on others makes us happier and brings purpose to our wealth. It also has the added benefit of the next generation being able to see generosity in action. What better healthy habit is there?

Happy, healthy, wealthy and wise

Use the new year as an opportunity to feel more in control of your financial wellness. This should include a wealth checkup, routine healthy spending habits and important life stage adjustments as you age and grow your wealth. Being generous in giving and mindful about your investments will add to your happiness factor. While this may seem daunting, you certainly don’t have to tackle everything at once or do it alone. Work with your financial advisor to get focused on what is most important to you and what will have the biggest impact on your financial wellness in the coming year.

This article was originally published on

RBC Wealth Management does not provide tax or legal advice. All decisions regarding the tax or legal implications of your investments should be made in connection with your independent tax or legal advisor.

RBC Wealth Management, a division of RBC Capital Markets, LLC, registered investment adviser and Member NYSE/FINRA/SIPC.

Angie O'Leary

Head of Wealth Planning
RBC Wealth Management–U.S.

Let’s connect

We want to talk about your financial future.

Related articles

Five essential life documents for common-law couples

Your finances 6 minute read
- Five essential life documents for common-law couples

Data breach: How to protect yourself

Your finances 4 minute read
- Data breach: How to protect yourself

The re-imagined bucket list: How to finance your dreams

Your finances 5 minute read
- The re-imagined bucket list: How to finance your dreams