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Top Financial Tips for 2025

The new administration in Washington has promised radical changes, which may translate into exceptional opportunities for investors

By Lucy Lazarony

Each new year arrives with its own risks and opportunities, perhaps none more than 2025. President Donald J. Trump returned to the White House and quickly started launching radical changes he had promised during his campaign.

A person going through their finances. Next Avenue, financial planning 2025
"Re-examine your finances to help find areas you can cut back on and savings opportunities you may be missing out on," Courtney Klosterman says.  |  Credit: Getty

Among the federal agencies in for some of the biggest change and greatest budget cuts are those that regulate capital markets and big corporations. Considering Trump's mercurial management style, it will be challenging, to say the least, for smaller savers to anticipate windows of opportunity that may open in the New Washington.

Many employers offer matching contributions for company 401(k) plans. Make sure you are contributing enough to snap up this free money.

There are, however, some financial moves that a plurality of professional financial advisers we talked to say small investors should consider. Here are their top financial tips for 2025.

Small Changes Can Reap Big Rewards

1. Save more. This tip may seem obvious but saving even a little more is an effective way to bolster your finances.

"The beginning of the year is a great time to increase the amount of money you're putting into your 401(k), IRA or other investment account," says Mike Hunsberger, a Certified Financial Planner and owner of Next Mission Financial Planning in Saint Charles, Missouri. "This is an especially great time if you get a cost-of-living or salary increase at the beginning of the year because you haven't gotten used to living on the increase."

"Bumping up your savings rate by even 1% each year will have a big impact on how much you'll save over your lifetime," he adds.

Save Any Free Money You Get

2. Make good use of a year-end bonus. Be smart and invest that extra money your boss is sending your way.

"Consider maxing out a Roth IRA with your year-end bonus," says Filip Telibasa, a Certified Financial Planner and owner of Benzina Wealth in Sarasota, Florida. "Roth IRAs allow tax free earnings, if used correctly. This means the sooner you contribute and invest in the account, the bigger the impact of the tax savings over time."

3. Make the most of your 401(k). Many employers offer matching contributions for company 401(k) plans. Make sure you are contributing enough to snap up this free money.

"As an example, if your company matches 100% of the first 3% you contribute and then 50% of the next 2% you contribute then you would need to contribute 5% of your pay to receive the full benefit of your company's 4% match," says Lawrence Sprung, a Certified Financial Planner and author of "Financial Planning Made Personal."

4. Update your estate plan. The start of a new year is a good time to review your beneficiaries and your power of attorney designations.

"Start the year off by resolving to check all asset accounts to make sure the beneficiaries are correct, and percentages of inheritance are as well," says Rick Miller, a financial planner and investment advisor at Miller Investment Management in Manassas, Virginia. "Likewise, if your will and powers of attorney are more than five years old, they should be reviewed also and updated if necessary."

Prepare to Repair Your Home

5. Build a home-maintenance and repair fund. If you are a homeowner, it would be wise to begin the year by putting aside money for maintenance costs and home repairs.

"Nearly half of homeowners have $1,000 or less saved for home upgrades and maintenance costs," says Courtney Klosterman, who handles home insights for Hippo Insurance, an online insurance company based in Palo Alto, California. "That may be enough to cover seasonal maintenance and smaller repairs."

Klosterman recommended a larger financial cushion that can be a big help when addressing multiple projects simultaneously or more extensive problems, like replacing rotted wood, repairing roof damage or replacing a heating and cooling system. A larger cushion should be liquid savings equal to 1% to 3% of your home's value.

Review Spending and Cut the Fat

6. Trim expenses. Look for areas where you can cut back on your expenses. You may be surprised where you can free up savings.

"Re-examine your finances to help find areas you can cut back on and savings opportunities you may be missing out on," Klosterman says. "Track spending to help cut down on impulsive and nonessential costs. Look into tax breaks that may lower your tax burden."

7. Open a 529 plan. Get a start on your children's college savings with a 529 plan, a tax-advantaged investment account that helps to save money for college.

"Open a 529 plan and set up automatic monthly contributions," advises Martha Kortiak Mert, chief growth officer at Saving for College in Miami. The cost of college is a major concern for many families and 529 plans, which are run by the states, can help them prepare for those costs and reduce dependency on student loans.

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"Investments in a 529 plan grow tax-deferred," Kortiak Mert adds, "and withdrawals are federal tax-free when they are spent on qualified education expenses."

"The new year is the perfect time to rebalance any investments."

What are "qualified education expenses"? Tuition and fees, room and board, textbooks, special-needs expenses and computers for students enrolled in two- and four-year colleges and universities, graduate schools and technical and trade schools.

Kortiak Mert says, "529 plans can be opened by almost any U.S. residents including parents, grandparents and other relatives or family friends."

Be Vigilant of Your Investments

8. Rebalance investments. Look at your investment portfolio and assess where you stand. Was 2024 a good year for you? Is it time to make some changes for 2025?

"The new year is the perfect time to rebalance any investments," says Mark Henry, founder of Alloy Wealth Management in Greenville, South Carolina. "Look at where you are now, and where you want to be by the end of this year. Did you lose money in the stock market last year? Are your investments tax- and risk-diverse?

"The older we get," he adds, "the less time we have to recover from stock market dips, so it's important to adjust for lowered risk tolerance over time. It's a good idea to meet with a trusted financial professional about what the markets are expected to do this year, and opportunities you can take advantage of."

Get Serious about Budgeting

9. Create a budget — and stick to it. A new year means a new budget. Review your savings and spending plans for 2025.

"A budget is the cornerstone of financial success," says Casey Brueske, community education development specialist at PenAir Credit Union in Pensacola, Florida. "It helps you track where your money goes and ensures you're prioritizing your goals. Start by listing your income and expenses and look for areas where you can cut back to save more."

10. Automate your finances. Simplify your financial life by setting automatic bill payments and automatic transfers to savings and investment accounts.

"Automation ensures you're consistently working toward your goals, even during busy months," Brueske says.

Lucy Lazarony is a freelance journalist living in South Florida who writes about personal finances, the arts and nonprofits. Her writing Is featured on Next Avenue, Bankrate.com, MoneyRates.com, MSN.com and the National Endowment for Financial Education. She previously worked as a staff writer at Bankrate.com. Read More
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