Feeling anxious about your finances in 2026? Here's a comprehensive guide to five essential money moves recommended by financial experts. By Megan Cerullo, Reporter, MoneyWatch. (https://www.cbsnews.com/team/megan-cerullo/)
December 26, 2025 / 8:40 AM EST / CBS News
Many Americans are entering 2026 with significant financial concerns, as an affordability crisis coincides with stagnant wages, making it crucial to take proactive steps to secure your finances. Additionally, a major tax overhaul under the Republicans' 'big, beautiful' law, or OBBBA, presents opportunities to leverage the new regulations. Other financial changes, such as potential interest rate cuts from the Federal Reserve, could also impact your bank balance next year, according to experts.
A recent Vanguard survey reveals that approximately 84% of Americans have set new financial resolutions for 2026, including building an emergency fund or opening a high-yield savings account. This resolve may be driven by growing unease about the year ahead, as about one in three Americans anticipates their finances will worsen in 2026, according to Bankrate, the highest share since 2018.
Sabino Vargas, a certified financial planner and senior financial advisor for Vanguard, advises, 'The last few weeks of the year are ideal for reviewing your finances, especially savings, and understanding how the new tax law might affect you.'
Here are some expert-recommended strategies to get your finances in order as you prepare for the new year.
Prepare for New Tax Changes
The OBBBA, signed into law by President Trump on July 4, introduces new tax deduction rules for many Americans, including seniors and workers who earn tips or overtime.
Under the 'no tax on tips' provision, employees can deduct up to $25,000 earned in tips before December 31. It's crucial for workers to closely track their earnings due to IRS reporting requirements, according to experts.
Vargas advises, 'Document the numbers,' emphasizing this for individuals who work overtime as well.
Some seniors are also eligible for an enhanced senior deduction starting in 2025, offering an additional deduction of $6,000 for individuals aged 65 and older, or $12,000 per couple, if they qualify.
However, the deduction phases out for single earners with modified adjusted gross income (AGI) above $75,000 or $150,000 for joint filers. Seniors should check their income to determine eligibility.
Modified AGI is calculated by adding back certain deductions and non-taxable items to your AGI, found on line 11 of Form 1040.
Create a Realistic Budget
Affordability is a top concern for Americans, whose wages are not keeping pace with inflation. Financial experts recommend creating a budget that aligns with your lifestyle to avoid unnecessary spending.
Alexa von Tobel, founder and managing director of Inspired Capital, suggests the 50/30/20 budgeting rule: 50% for essentials, 30% for lifestyle expenses, and 20% for goals like debt repayment or saving for vacations.
She advises, 'A new year is an excellent time to reassess your budget against this framework and make adjustments as needed.'
If the 50/30/20 rule doesn't suit your lifestyle, explore other budgeting methods like the envelope system or zero-based budgeting. The envelope system sets spending limits for categories like dining out, while zero-based budgeting allocates every dollar to specific categories until nothing is left unaccounted for.
AI tools can automate savings processes, making money management less about discipline and more about system design, according to von Tobel.
Prioritize High-Interest Credit Card Debt
Vanguard's Vargas emphasizes the importance of paying down high-interest debt, as it can quickly spiral out of control. When tackling debt, von Tobel recommends focusing on credit card balances with the highest annual percentage rates (APRs).
She suggests, 'Line up your balances by APR, automate minimum payments, and aggressively target the highest-interest line first. Structure always beats willpower.'
Another popular strategy is the snowball method, where you list debts by balance and pay off the smallest ones first to build momentum.
Borrowers have options like transferring balances to 0% balance transfer cards for up to 21 months or negotiating a lower APR with their credit card issuer.
Secure Savings Rates Before They Drop
The Federal Reserve's recent interest rate cut by 0.25 percentage points, its third this year, and hints of an additional cut in 2026, suggest opening a certificate of deposit or high-yield savings account before rates fall further, according to Sam Taube, a lead writer with NerdWallet.
Online financial institutions offer some of the highest rates, around 4% annual percentage yields.
Taube advises, 'If the Fed lowers rates further, fixed yields will drop, so opening a CD or high-yield savings account sooner is advisable.'
Maximize Employer Matching Contributions
If you have a tax-advantaged savings account through your employer, such as a 401(k), it's crucial to make the most of it. Aim to contribute enough to receive the full employer match.
Vargas recommends starting by understanding your employer's contribution match, typically between 3% to 6% of your salary, and contributing at least that much to your account.
Setting up an automatic payroll deduction is a convenient way to ensure consistent contributions, according to von Tobel, who notes that small, consistent increases can lead to significant long-term compounding.
Before year-end, consider making an extra contribution to your 401(k), as it can lower your taxable income and potentially reduce your tax bill in April, according to CBS News business analyst Jill Schlesinger.
