To prepare for unexpected expenses, consider making a New Year’s resolution to set up a high-interest savings account and contribute regularly until you have accumulated at least three months’ worth of expenses. This money should stay there until it is needed for real emergencies – such as medical bills or major repairs – and not for unnecessary expenses.

Student loans and credit card debt are common sources of financial anxiety for Generation Z. While it’s ideal to avoid debt in the first place, the next best solution is to resolve to pay it off or at least manage it better in the new year.

One strategy is to use the debt snowball plan to manage your debt from the smallest amount to the largest. However, you may also want to target debts based on their interest rates. For large student loans, choosing a realistic repayment plan that prevents default can be a good compromise while considering future repayment options.

Although Experian data showed Gen Z’s credit scores increasing in recent years, the average credit score for this group still remained below the national average. If your credit score needs to be improved, it may be difficult to get a mortgage or other loan at a good interest rate.

Planning for smart credit building in 2025 can include getting rid of existing debt, never missing payments, and avoiding unnecessary borrowing. It is also important not to carry card balance as this can result in costly interest charges.

Using a credit monitoring service is a good way to keep an eye on your progress.

Bank of America’s 2024 survey also found that only 20% of Gen Z respondents are contributing to their retirement savings. Even though retirement may seem a long way off for a young adult, if you put it off, you’ll miss out on several more years of compounding interest and risk not saving enough.

Although it may seem difficult to save money for retirement, deciding to contribute a small amount regularly to an IRA, 401(k), or similar account will help. Additionally, this New Year’s resolution offers other possible benefits, such as: B. Employer 401(k) shares, tax deductions for some pension contributions and the savings credit.

The state of the real estate market and high mortgage interest rates can deter many members of Generation Z from homeownership. However, a good New Year’s resolution is to at least weigh the costs and benefits of buying a home over the next few years and then create a financial plan if that is your goal.

Things to consider include available savings for down payment and closing costs, mortgage affordability, credit score, and home prices in the area. If you’re an aspiring Gen Z homeowner, you should also regularly save for upfront costs and take steps to build credit, get rid of other debt, and live on a budget.

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This article originally appeared on GOBankingRates.com: 7 Financial New Year’s Resolutions for Generation Z