The start of the new year is a great time to revisit your financial plan. Knowing the best money moves to make — and the moves you should avoid — can set you up on the path for a financially successful year ahead.
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GOBankingRates spoke with Eric Franklin, CFP, managing principal and co-founder of Prospero Wealth, to find out some of the money behaviors you should ditch in 2025.
Although we’ll have a new president soon, Franklin doesn’t see this as a reason to upend your current financial strategy.
“How much ink has been spilled about repositioning assets to take advantage of the new U.S. presidential regime? There’s so much excitement and dismay, and journalists are highly aware that they can fan these flames and drive panicked urgency,” he said.
“While that’s good for selling advertising, the people who will win are the ones who plug their ears, save through thick and thin, and use low-cost, tax-efficient, diversified strategies with consistency.”
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It’s always important to have a plan for the worst-case scenario.
“You will face setbacks,” Franklin said. “We all do. If you have people who depend on you, carrying term life insurance and having some disability coverage — 1 in 4 people will rely on that disability coverage — are table stakes. Employer benefits are a good place to start.”
He also recommends keeping expenses low and avoiding temptations to overspend.
Going along with planning for the worst, Franklin said it’s essential to prioritize building and maintaining an emergency fund.
“Our daily lives are full of surprises,” he said. “In the absence of perfect planning, emergency reserves are the shield protecting you from financial folly. Most advisors will recommend three to six months of cash reserves put aside in an account separate from your checking account so you do not see it every day.
“Behaviorally speaking, it’s best if these assets are at a completely separate institution,” Franklin continued. “You want these funds out of sight and out of mind, accessible within a couple of days for any emergency, and replenished as a top priority once withdrawn.”
Some people need a helping hand to keep their finances on track. If you’re one of those people, be sure to reach out to a financial professional who can provide guidance and support.
“Most people are smart enough to figure out how to manage their finances, yet they fail ignominiously to do so,” Franklin said. “Reasonable intelligence and good intentions combined with a lack of action leave many people with guilt and a lack of confidence in their financial futures.
“If you’re never going to light up at the thought of financial planning, rebalancing or learning how to invest more tax efficiently — and you’re likely to keep neglecting it — you should seek help.”
Money has long been seen as a taboo topic, but not talking about it can cause more harm than good.
“More people should be speaking about their financial issues and learning from each other,” Franklin said. “If you’re looking for improved financial outcomes, the most important thing you can do is find yourself accountability partners. Look for people you already trust or for mentors who can help effectively structure your next best steps.”
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This article originally appeared on GOBankingRates.com: I’m a Financial Advisor: 5 Worst Things You Can Do for Your Finances in 2025
