Financial Wellness Month—10 Actions for a Strong Start

With the rush of holiday spending behind us, January marks National Financial Wellness Month. The start of the year is an ideal time to assess both what’s working and what needs adjustment, ensuring that your financial strategy remains aligned with your long-term goals. 

In this article, we’ve compiled 10 key areas for clients to consider as 2026 takes shape. These include five core action items and five broader topics that ensure a comprehensive approach to financial wellness. By starting the year strong, you can navigate 2026 with greater confidence and less complexity.

1. Develop a Compensation Plan

At the start of the year, it’s worth considering your compensation structure over the next twelve months. If you anticipate your expenses changing in 2026, last year’s compensation planning may no longer be sufficient. Areas to revisit can include:

• NQDC elections. Non-qualified deferred compensation (NQDC) plans typically offer flexibility regarding the timing of distributions, but changes need to be made in line with plan rules.
• Employee stock purchases. Consider adjusting purchases made through Employee Stock Purchase Plans (ESPPs) or similar programs to match your liquidity needs.
• Restricted share vesting. Planning for Restricted Stock Unit (RSU) or Performance Stock Unit (PSU) vesting events can help mitigate any tax impacts.

2. Position Cash Holdings

As with compensation planning, it can also be helpful to revisit the positioning of your cash holdings in January. If spending plans have changed, your short-term asset allocation may need to change too. 

For example, you might anticipate significant expenses this year relating to taxes, tuition, and philanthropy. Depending on the timing and magnitude of these outflows, the associated cash may best be held in checking accounts, money market funds, or short-term bonds. By ensuring that cash holdings are matched with planned spending, you can reduce the risk of last-minute liquidity shortfalls.

It’s especially important to be thoughtful about cash holdings in the current interest rate environment. In 2026, the Federal Reserve is broadly expected to cut rates, which could impact the relative returns of different short-term instruments.^[1]  Working with your advisor to structure cash holdings can help balance liquidity needs with purchasing power.

3. Establish Credit Readiness

Cash holdings and compensation are typically the primary sources of funding to cover planned expenses. But not all outflows are easily anticipated. In the case of unexpected opportunities or emergencies, establishing access to credit can help meet time-sensitive liquidity needs.

One way to establish credit readiness is to set up a securities-based line of credit before it is actually needed. Without access to credit, unplanned expenses might require selling long-term assets, potentially at unfavorable prices. As interest rates shift in 2026, your advisor can help you evaluate available credit tools.

4. Organize Your Financial Team

Part of financial wellness is having the right team in your corner. January is a good time to make sure that your team is organized and aware of any recent life changes. Depending on your situation, that team will likely include a wealth manager, a tax professional, an estate planning attorney, and potentially other specialists in key areas. 

It’s especially important to be proactive about tax support in 2026. Due to an ongoing industry shortage, many CPAs are either not taking on new clients or need to be engaged well before the next year’s tax filing deadline. Seeking referrals and starting the onboarding process early can help avoid delays during tax season.

5. Review Your Investment Portfolio

Over the past few years, the stock market has seen strong returns, with many other asset classes struggling to keep up. As a result, investors could be starting 2026 with above-target exposure to equities. The new year offers an opportunity to work with your advisor to ensure that your asset allocation remains appropriate for your long-term financial goals.

That discussion can also cover asset location—the strategy of placing assets in specific accounts depending on their tax treatment. For instance, investments that generate ordinary income (such as high-yield bonds or REITs) are often best suited for tax-deferred accounts. Depending on your tax projections, optimal asset location may have changed heading into 2026.

Comprehensive Financial Wellness: 5 Areas to Review

Above, we looked at action items focused on core components of your wealth strategy. But financial wellness goes beyond just portfolio management and tax mitigation. For a comprehensive approach heading into 2026, it’s also worth giving thought to the following areas:

6.    Philanthropic Planning. The One Big Beautiful Bill Act (OBBBA) introduced several changes to charitable giving rules. For example, high-earners may no longer receive the full benefit of their donations above a certain amount.  Discuss with your advisor whether OBBBA changes could call for a shift in your approach to philanthropy.

7.    Beneficiary & Titling. Check that all beneficiary and transfer provisions on your accounts are current. If you experienced changes to your family structure last year, updates could be in order.

8.    Continuity & Access. Having health directives and power of attorney documents in place can ensure that your wishes are respected if the unexpected occurs. Moreover, many investment platforms offer digital access to designated family members to help with account management in the case of an emergency.

9.    Digital Security. Tools like multi-factor authentication can offer security against hacks and fraud. Practices like updating old or frequently-used passwords can also offer peace of mind.

10.    Goal-Setting. Finally, consider taking some time to set financial goals for 2026 while reviewing what you achieved in 2025. Establishing clear objectives early in the year can help align your daily decisions with your long-term values.

Conclusion: Starting Strong

Financial wellness is an ongoing process. But the new year offers a time to pause, reflect, and consider how your current picture aligns with your desired vision. Building a strong foundation in January can pay dividends throughout the year to come.

If you’re already a Badgley Phelps client, your wealth management team can help you navigate any of the topics discussed today. If you’re not yet a client, contact our office to start the conversation and learn how our team can help. Finally, should someone in your network benefit from reviewing these topics, we invite you to share this guide with them as well.
 

^[1] Fed Outlook 2026: Rate Forecasts and Fixed Income Strategies, iShares Link