Improving your Financial Health in 2026

By: Tom Betros, CFA, CFP® and Laura Betros, CFP®

---

---

Prepare a budget

Reviewing your income and expenses regularly can help identify where you are overspending and can help you adjust as the year goes along. Write down a budget for each spending category (food, entertainment, subscriptions, utilities, etc.) and hold yourself accountable. Work with your partner or spouse to assess excess expenses. This process will help to eliminate unnecessary spending and may free up additional cash for saving and investing.

TIP: Mint is a great budgeting app and is free to use.

Build an emergency fund

Having an emergency fund can help you and your family weather the storm if there is job loss, or any unexpectedly large expense. The last thing you will want to do is tap into your retirement savings as it could impact your standard of living in retirement. The general rule is to have 3-6 months of expenses in savings. If you are having trouble growing your emergency fund, consider creating a budget and find ways to reduce expenses.

TIP: Have a small portion of your paycheck direct deposited into your savings account. That way it’s automatic and you don’t have to think about it.

Pay off high interest debt

Credit card debt, student loans, and car loans are examples of liabilities that have very high costs of borrowing. As long as these loans and debt remain outstanding, interest will continue to accrue, creating a drag on your cash flow. This is especially true on credit card debt, which has no maturity date, and typically has the highest interest rate. Making credit card payments in full every month is incredibly important for cash flow purposes, and importantly, will improve your credit score which will in turn improve borrowing rates when applying for loans in the future.

TIP: Round up on payments and pay the loans with highest interest rate first.

Consider a High Yield Savings Account

Do you have cash earning little to no interest at your bank? Many banks offer high yield savings accounts that offer higher interest rates than typical checking or savings accounts. Being able to earn more interest on your hard-earned dollars means you are more likely to keep up with inflation, strengthening your purchasing power over time. Most banks provide FDIC insurance coverage, subject to limits and other terms & conditions.

TIP: Be mindful of fees charged as this will lessen the return. There are providers with no account fees.

Meet the employer match in your Qualified Plan

Most employer-sponsored plans that allow employee deferrals have an employer-matching component that incentivizes you to contribute to the plan. While plans differ in the matching schedule, it is incredibly important to take advantage of the essentially “free money” they are contributing for you*. Understanding your employers' matching schedule and vesting schedule will help you make the most of your plan.

Some examples of employer-matching schedules are:

Ex 1: Match 3% up to the first 6% of employee contribution

• To take full advantage of the match you will need to contribute 6%. If you add your contribution plus the employer’s your total contribution is 9%!

Ex 2: Match 5% up to the first 5% of employee contribution

• To take full advantage of the match you will need to contribute 5%, for a total contribution of 10%!

See your company’s Summary Plan Description (SPD) to find this information.

*Most employer-matching contributions are subject to a vesting schedule that requires a certain service requirement to be met before you are 100% vested. 100% vesting means all employer contributions are now yours.

Align Portfolio with Risk Tolerance and Goals

With equity markets continuing to perform well as we move into 2026, it would be prudent to revisit your asset allocation, particularly, the percentage of your portfolio in equities. As equities outperform other asset classes like bonds, a portfolio can become imbalanced and mis-aligned to the initial asset allocation. This can mean that the portfolio no longer aligns with how you feel about risk and the volatility you can stomach in a downturn. Rebalancing the portfolio will re-align your portfolio with the initial target allocation.

Additionally, it is prudent to review the make-up of your equity allocation. A portfolio that is highly concentrated in a few stocks is exposed to not only market risk, but also the operating risk of the individual companies owned. This type of risk is called idiosyncratic risk and can result in your portfolio going down when the overall market goes up. A financial advisor can make sure your portfolio is aligned with where you are in life and to make sure you are not taking too much risk.

Review Beneficiaries

It is important to review your IRA, 401(k), Life Insurance, and Brokerage Account beneficiaries periodically as the designations typically will override your will. Certain life events such as marriage, divorce, birth or adoption of a child, or death of a loved one may be reasons to update them, although not always.

Naming beneficiaries keeps the accounts out of the probate process which is usually time-consuming and costly. It provides a more seamless transition of assets and ensures your money is going to who you desire instead of leaving it in the hands of the courts. If you had a recent life event, spend a few minutes looking through your accounts to see if the beneficiaries need to be updated.

TIP: You can even add beneficiaries to your checking and savings accounts!

Take Steps to Secure Your Accounts

Cybersecurity - Add 2-factor (multi-factor authentication) to all bank accounts, investment accounts, credit cards, and any other accounts with sensitive information. Use a unique password for each account and save securely.

The information provided in this blog post is for general informational purposes only and should not be construed as personalized investment advice or a recommendation to buy or sell any security. D’Arcangelo Financial Advisors, LLC does not guarantee the accuracy or completeness of the information presented. Readers should consult with a qualified financial professional before making any investment decisions. Past performance is not indicative of future results. All investments involve risk, including the potential loss of principal.