8 Things To Do Differently With Your Money in 2025

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2024 has been chock-full of events sure to leave an impact on capital markets. Be it the election of a new president, the Fed’s cutting of interest rates or a boon in the stock market, individuals may be wondering what the events of 2024 will mean for their savings, investments and future goals. More importantly, what should they do differently with their money in 2025 as a result?

While no one has a crystal ball, there are some informed opinions out there. GOBankingRates chatted with experts to find out what they recommend doing differently with your money in 2025.

Consider Funding a Roth IRA

JoePat Roop, president of Belmont Capital Advisors, predicted that, as a result of President-elect Donald Trump’s 2024 election win, the Tax Cuts and Jobs Act will be extended past its current expiration date of December 31, 2025. If this were to happen, it could mean that taxes will be lower for at least the next few years. And working professionals could use this to their benefit.

Instead of blindly contributing to a 401(k) or a traditional IRA where all future withdrawals are taxed, Roop advised workers to see if they have a Roth option available to them. Paying a one-time lower tax rate now as opposed to paying higher rates in the future could save them money.

Delay Social Security and Utilize Roth Conversions

For similar reasons, Roop advised middle-class retirees with a 401(k) or traditional IRA to take advantage of the lower tax rate and utilize Roth conversions.

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Additionally, if a retiree were to postpone Social Security, they’d likely have lower income during the years they are converting, potentially reducing the tax impact of the conversion.

Don’t Wait on Student Loan Forgiveness

In the past couple of years, there have been a lot of questions regarding student loan forgiveness. In 2023, the Supreme Court struck down President Joe Biden’s plan to discharge student loan debt for tens of millions of Americans. And as reported by CNBC, borrowers may soon have even higher payments under the Trump administration.

Roop recommended whittling away at this debt, beginning with the highest-interest loans first. “It’s worth reminding the public to get out ahead of student loans,” Roop said. “They’re not even forgiven in bankruptcy; they are with you for life.”

Adjust Your Budget

“Inflation isn’t going away entirely, so adjust your budget to account for rising costs in essentials like groceries, utilities and healthcare,” said Antwyne DeLonde, founder and CEO of VisionX.

This suggestion could become even more necessary if and/or when Trump’s tariffs go into effect, with one estimate from the Peterson Institute for International Economics projecting an increase of $2,600 annually for U.S. households, as reported by CNN. Look for areas to cut back (like eliminating subscriptions you don’t use) and plan ahead for price increases.

Lock In a Fixed Rate of Return

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According to Roop, price-to-earnings ratios are approaching all-time highs. But big firms are projecting there may be a recession in the next couple of years. Because of this, take a close look at your investments.

“Especially for people getting ready to retire, be cautious,” Roop said. “Roll back some of the profits that you’ve seen the markets give you.” Interest rates, while cooling, are still abnormally high. This is why Roop recommended now as a great time to lock in a fixed rate of return with a certificate of deposit (CD) or a Treasury bond.

Write a One-Page Plan

This is something people need to do any year if they haven’t already, but it’s still worth mentioning. Roop stressed the importance of understanding your current financial situation and the steps necessary to reach your financial goals. And writing down a simple one-pager will do the trick.

“People are surprised to hear me say that most clients call me within a month of retirement, but it would have been nice to see them five or 10 years ago so we could have dialed some things in,” Roop said. “Put the important things in front of you to keep you on track.”

Have a Fixed Annuity That Provides Lifetime Income

The Social Security Administration announced that Social Security benefits will increase by 2.5% in 2025, but Medicare premiums are set to increase by about 6%. See the problem? Roop assessed that, each year, retirees are going to get less and less money.

So how can you incorporate this stark reality into your financial plans? Roop recommended having a fixed annuity (as opposed to a variable annuity) that provides lifetime income and guarantees you won’t run out of money. “Having a portion of your funds in something that can’t be eroded by the stock market is great. It’s not directly correlated to stocks and bonds,” he said.

Pay Attention to Online Spending

It’s also a good idea to pay attention to online spending in the new year. Being able to purchase things online so easily can drain a bank account, according to Ramsey Solutions. And Trump’s proposed tariffs on goods could have your wallet feeling additional strain.

Do yourself a favor and monitor screen time in the new year. Ramsey Solutions suggested deleting shopping apps, sleeping on potential purchases before buying them and checking in with a budget accountability partner.

Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.