Breaking News: Your 15-Minute Guide to Smart Money Moves for 2025
As a financial reporter covering the latest trends in personal finance, I’m here to share crucial money moves you need to make before the calendar flips to 2025. With economic shifts on the horizon and interest rates expected to decrease, now is the perfect time to get your finances in order.
Quick Money Moves You Can’t Afford to Skip
Let’s start with your retirement savings. Chris Berkel, investment adviser and President at AXIS Financial, says, “The more money you can put into a retirement account, the better.” If you haven’t maxed out your 401(k) or IRA contributions for 2024, now’s your chance.
Your FSA funds deserve immediate attention. These accounts typically follow a use-it-or-lose-it rule, so check your balance and spend any remaining money before December 31st. Stock up on eligible items like contact lenses or prescription medications.
Savvy savers are taking advantage of today’s high interest rates. With the Federal Reserve signaling more rate cuts ahead, consider these money-smart moves:
- Lock in current high rates with CDs
- Move your savings to high-yield accounts
- Look into mortgage refinancing if rates drop as expected
Expert Tips for Building Wealth
Emily Luk, CEO and co-founder of Plenty shares a surprising insight: “The No. 1 investing mistake that today’s adults are making is holding too much cash.” She recommends keeping 3-6 months of expenses in emergency savings and investing the rest wisely.
Here’s a simple formula for investment allocation: subtract your age from 100. That number is the percentage you might consider investing in stocks, with the rest in safer options like bonds. For example, a 30-year-old might aim for 70% stocks and 30% bonds.
Year-End Tax Moves That Matter
Don’t miss out on tax advantages. Consider these actions:
- Make charitable donations (deductible up to 50% of your adjusted gross income)
- Review Roth conversion opportunities
- Take required minimum distributions if you’re 73 or older
Planning for 2025
Start the new year strong by setting clear financial goals. Paul Carlson, CPA and managing partner at Law Firm Velocity, emphasizes the importance of checking your credit report: “It’s good information to have if you’re planning for things like a mortgage or need to make any big purchases or loans in 2025.”
Review your insurance coverage and update beneficiaries. Life changes like marriage or having children might require different coverage levels.
Remember to check your investment portfolio. Market conditions change, and your investments should align with your goals. Consider low-cost index funds for stock exposure and Treasury-backed securities for bonds.
Looking Ahead
Financial experts predict mortgage rates could fall to around 6% by year’s end. If you bought when rates peaked, watch for refinancing opportunities. The old rule suggests refinancing when you can lower your rate by at least 1%.
With these steps, you’ll be better positioned for whatever 2025 brings. Remember, financial planning isn’t just about money – it’s about creating security and opportunities for your future.
Stay informed and watch for more financial updates as we move into the new year. Your future self will thank you for taking these intelligent money steps today.