What a year 2024 has been for personal finance. We saw the stock market pick up steam, interest rates come down (along with the inflation rate) and an overwhelming surge in the popularity of crypto. And, of course, we saw Donald Trump sweep the presidential election, a victory that is still echoing across Wall Street.
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Now, a new year is here and it’s time to reflect on the past 12 months and, more importantly, get your financial ducks in a row for 2025.
“It’s the perfect time to press pause and take a closer look at your finances,” said Stefan Greenberg, CFP, CFS, CLTC, managing partner, Lenox Advisors. “Year-end planning isn’t just about tying up loose ends; it’s about setting yourself up for a strong start in 2025. And while a financial review might sound overwhelming, a few simple steps can help you stay on track and move closer to your goals.”
So, what should you do in 2025 to get a fresh start? Here’s a five-step guide to help you have a financially successful year.
How much were you able to put away in your emergency fund? If, like so many Americans, you fell behind here, make setting cash aside for the inevitable unexpected expenses a priority.
“It’s critical to have enough cash set aside in case you find yourself without a regular paycheck,” said Ryan A. Hughes, founder and portfolio manager at Bull Oak Capital. “We have been seeing an economic trend of declining job openings and employees showing increased hesitation to quit their current roles. If the U.S. economy experiences a sudden shock, such as a geopolitical event or a market downturn, we could see a spike in layoffs.”
Hughes recommended maintaining at least six months’ worth of living expenses in a high-yield savings account (HYSA).
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Though no investments are 100% protected, and there is always inherent risk involved, it’s wise to check your asset allocation and make sure it’s tailored to be as well guarded against volatility. This means really digging into your investment portfolio and giving it all a good hard look.
“2024 has been a phenomenal year for stocks and cryptocurrencies,” Hughes said. “It is time to rebalance your portfolio by trimming your winners and reinvesting those proceeds into another asset. No asset class will continually go up with periods of volatility. We are expecting volatility in 2025. You want to make sure your portfolio matches your personal risk tolerance.”
