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January offers a fresh start for our finances — but it begins with a look back.

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Before setting goals or intentions for the new year, step back to reflect on what went right (and wrong) in 2025, suggests D’Andre Clayton, co-founder of Clayton Financial Solutions in Greensboro, North Carolina.

“Take out your credit card and bank statements, and really take a look at them,” he says.

Do you like what you see? How much went toward online shopping? Which spending categories are in need of a detox?

You can use past actions to inform and improve your financial situation going forward.

Here are some additional ways to set yourself up for a successful financial reset.

1. Reflect, but don’t dwell

Explore why spending was higher than anticipated or savings fell short.

“Was there a cash flow issue? Did you not get paid as much as you thought? Or is it lifestyle creep, and we’re just spending more and more over time? Or was there a one-off event?” asks Dwayne Reinike, a certified financial planner (CFP) and founder of Valiant Financial Planning in Kirkland, Washington.

The answers to those questions can impact what changes you make going forward, but Reinike warns against getting sidetracked with regret.

Treat January like a fresh start, he says. “If we didn’t save enough, instead of regretting that, let’s reset the plan and ask, what will it take to save that amount now?”

2. Break big goals into small steps

If you have a big financial goal — like saving more in your retirement account or building an emergency fund — break it into smaller, “bite-size” milestones, Reinike says.

“Looking at the big picture can be overwhelming, so break it into short-term sprints. You get to the finish line much quicker and get a dopamine hit of success of seeing a goal accomplished, like paying off one credit card,” he says.

For example, you can break your goal of saving more for retirement into achievable steps. The first can be to simply open a new retirement account. Next, set up automatic transfers each month. After that, increase your contribution by a little.

Achieving one small goal can give you motivation to keep going, he adds.

If your goal is to create an emergency fund, the smaller steps could include creating a new budget, cutting back on non-essentials to free up cash and then directing that money into a high-yield savings account.

3. Aggressively pay off debt

For many consumers, paying off debt is a top priority, and it often requires a multi-pronged strategy.

“The trouble that people get into is that they accumulate some debt, and it snowballs to so much debt that they don’t know what to do,” says Kirk Reagan, a CFP and founder of High Flight Financial in Dallas.

That’s why he suggests creating a plan so you commit to paying off that debt as soon as possible. First, calculate your total debt. Then pay it down using either the snowball method — where you pay off the smallest amount of debt first — or the avalanche method — where you pay off the debt with the highest interest rate first.

To stick to that plan, Reagan suggests scaling back spending on categories like take-out, extra coffees and online orders. You might even want to share your plan with friends so they can help keep you on track with positive encouragement.

4. Embrace new saving and earning habits

The new year can also be a time to adopt frugal habits and hobbies. You could find free workouts on YouTube instead of paying for a subscription service, learn to cook new dishes at home, or host a game night with friends over going out, Clayton suggests.

“Look for activities that don’t cost as much, like hiking, going for a walk, visiting art museums or other free experiences in your area,” he says.

In addition, take some time to check financial statements for errors, review subscriptions that you no longer need, and shop around for auto and home insurance to see if you can find a better deal, says Kevin Estes, CFP and founder of Scaled Finance, LLC in the Seattle area.

If you have a partner, then one new habit could also be meeting to review your overall net worth, budget and savings goals for the year, he adds. “My wife and I watch football and update our net worth,” he says.

And don’t rule out increasing your income. “If you’ve got a side hustle or you’ve got a job where you can work overtime, January is a great time to do it,” Reagan says.

That extra cash can go toward savings, debt payments or another big financial goal.

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Kimberly Palmer writes for NerdWallet. Email: kpalmer@nerdwallet.com. Twitter: @kimberlypalmer.

The article 4 Ways to Relaunch Your Finances in 2026 originally appeared on NerdWallet.

By MARY CLARE JALONICK, KEVIN FREKING and LISA MASCARO, Associated Press

WASHINGTON (AP) — Senate Democrats are threatening to block legislation that would fund the Department of Homeland Security and several other agencies Thursday, potentially bringing the government a step closer to a partial shutdown if Republicans and the White House do not agree to new restrictions on President Donald Trump’s surge of immigration enforcement.

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There were some signs of possible progress late Wednesday as the White House has appeared open to trying to strike a deal with Democrats to avert a shutdown, and the two sides were discussing a possible agreement to separate Homeland Security funding from the rest of the legislation and fund it for a short time, according to a person familiar with the negotiations who insisted on anonymity to speak about the private talks.

As the country reels from the deaths of two protesters at the hands of federal agents in Minneapolis, irate Senate Democrats laid out a list of demands ahead of a Thursday morning test vote, including that officers take off their masks and identify themselves and obtain warrants for arrest. If those are not met, Democrats say they are prepared to block the wide-ranging spending bill, denying Republicans the votes they need to pass it and triggering a shutdown at midnight on Friday.

Senate Democratic leader Chuck Schumer of New York said Wednesday that Democrats won’t provide needed votes until U.S. Immigration and Customs Enforcement is “reined in and overhauled.”

“The American people support law enforcement. They support border security. They do not support ICE terrorizing our streets and killing American citizens,” Schumer said.

Schumer has pushed Republicans and the White House to strip the Homeland Security funding from the rest of the bill, which includes money for the Defense Department and other agencies. In the deal under discussion, Homeland Security would still be funded but for a short time to allow for negotiations on the Democrats’ demands. Other agencies included in the bill would be funded through the end of September.

Still, with no agreement and an uncertain path ahead, the standoff threatened to plunge the country into another shutdown just two months after Democrats blocked a spending bill over expiring federal health care subsidies, a dispute that closed the government for 43 days as Republicans refused to negotiate.

That shutdown ended when a small group of moderate Democrats broke away to strike a deal with Republicans, but Democrats are more unified this time after the fatal shootings of Alex Pretti and Renee Good by federal agents.

Democrats lay out their demands

There’s a lot of “unanimity and shared purpose” within the Democratic caucus, Minnesota Sen. Tina Smith said after a lunch meeting Wednesday.

“Boil it all down, what we are talking about is that these lawless ICE agents should be following the same rules that your local police department does,” Smith said. “There has to be accountability.”

Earlier Thursday, Tom Homan, the president’s border czar, said during a press conference in Minneapolis that federal immigration officials are working on a plan to begin drawing down the number of agents in Minnesota but that it would depend on cooperation from state authorities.

It’s unclear how far those assurances will go in satisfying Democrats. During the Trump administration’s immigration crackdown, Schumer said Democrats are asking the White House to “end roving patrols” in cities and coordinate with local law enforcement on immigration arrests, including requiring tighter rules for warrants.

Democrats also want an enforceable code of conduct so agents are held accountable when they violate rules. Schumer said agents should be required to have “masks off, body cameras on” and carry proper identification, as is common practice in most law enforcement agencies.

The Democratic caucus is united in those “common sense reforms” and the burden is on Republicans to accept them, Schumer said, as he has pushed for the Homeland Security spending to be separated out to avoid a broader shutdown.

Senate Majority Leader John Thune, R-S.D., has indicated that he might be open to considering some of the Democrats’ demands, but he encouraged Democrats and the White House to talk and find agreement.

Many obstacles to a deal

As the two sides negotiated, it was unclear whether they could agree on anything that would satisfy Democrats who want Trump’s aggressive crackdown to end.

The White House had invited some Democrats for a discussion to better understand their positions and avoid a partial government shutdown, a senior White House official said, but the meeting did not happen. The official insisted on anonymity to discuss the private invitation.

The House passed the six remaining funding bills last week and sent them to the Senate as a package, making it more difficult to strip out the Homeland Security portion as Democrats have demanded. Republicans could break the package apart with the consent of all 100 senators or through a series of votes that would extend past the Friday deadline.

Even if the Senate can resolve the issue, House Republicans have said they do not want any changes to the bill they have passed. In a letter to Trump on Tuesday, the conservative House Freedom Caucus wrote that its members stand with the Republican president and ICE.

“The package will not come back through the House without funding for the Department of Homeland Security,” according to the letter.

Republican opposition

Several Republican senators have said they would be fine with Democrats’ request to separate the Homeland Security funds for further debate and pass the other bills in the package. But it might be more difficult for Democrats to find broad GOP support for their demands on ICE.

Republican North Carolina Sen. Thom Tillis said he’s OK with separating the bills but is opposed to the Democrats’ proposal to require the immigration enforcement officers to show their faces, even as he blamed Homeland Security Secretary Kristi Noem for decisions that he said are “tarnishing” the agency’s reputation.

“You know, there’s a lot of vicious people out there, and they’ll take a picture of your face, and the next thing you know, your children or your wife or your husband are being threatened at home,” Tillis said. “And that’s just the reality of the world that we’re in.”

Republican Sen. John Cornyn of Texas said Democrats shouldn’t punish Americans with a shutdown and a “political stunt.”

Democrats say they won’t back down.

“It is truly a moral moment,” said Sen. Richard Blumenthal, D-Conn. “I think we need to take a stand.”

Associated Press writers Michelle L. Price and Seung Min Kim in Washington contributed to this report.

President Donald Trump’s border czar Tom Homan says immigration enforcement will reduce the number of officers in Minnesota but suggested during a news conference Thursday that it would happen only after ‘cooperation’ from state officials.

Homan was speaking for the first time since the president sent him to Minneapolis after a federal immigration officer fatally shot a protester on Saturday.

Homan doubled down on the need for local jails to alert Immigration and Customs Enforcement to people in their custody who ICE can remove from the country.

Homan said that means that fewer agents have to actually be out on the streets looking for people.

He acknowledged that immigration enforcement operations in Minnesota haven’t been perfect but was also adamant that the administration isn’t surrendering their mission.

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By MATT OTT, Associated Press Business Writer

WASHINGTON (AP) — U.S. applications for unemployment benefits inched down modestly last week, remaining at historically healthy levels despite recent high-profile layoff announcements.

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Applications for jobless aid for the week ending Jan. 24 fell by 1,000 to 209,000 from the previous week’s number which was revised upward by 10,000, the Labor Department reported Thursday. Analysts surveyed by the data firm FactSet were expecting 205,000 new applications.

Applications for unemployment benefits are seen as representative of U.S. layoffs and are close to a real-time indicator of the health of the job market.

The four-week average of jobless claims, which balances out some of the week-to-week ups and downs, rose by 2,250 to 206,250.

The total number of Americans filing for jobless benefits for the previous week ending Jan. 17 fell by 38,000 to 1.83 million, the government said. That’s the fewest since Sept. 21, 2024.