The ongoing elevated inflation has continued to strain the budgets of many Americans into 2024. However, the onset of the new year offers a prime opportunity to redefine financial strategies and set achievable goals.
According to WalletHub analyst Chris Lupo, as the nation approaches 2025, addressing rising issues like inflation and personal debt is crucial. “Top financial resolutions for 2025 should emphasize prudent budgeting, increased savings, and effective debt management,” Lupo stated in an interview with Finance Newso Business.
WalletHub has identified several key financial resolutions for 2025:
1. Develop a realistic budget and adhere to it
“With nearly $1.3 trillion in credit card debt held by Americans, establishing practical budgets has become essential,” Lupo noted.
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2. Increase savings
Savings play a vital role since many households lack adequate emergency funds. Lupo recommends aiming to save at least two months of take-home pay, gradually working towards a full year’s worth. He advises taking advantage of high-interest online savings accounts, which often offer APYs above 5%, and considering high-yield Certificates of Deposit (CDs) for additional savings potential.
3. Investigate refinancing options for high-interest debts
Given the high costs associated with interest rates, Lupo suggests exploring balance transfer cards and debt consolidation loans to alleviate financial strain.
4. Aim to reduce credit card debt by 25%
The average American carries over $10,000 in credit card debt, making it crucial to address this challenge. WalletHub suggests tackling this by targeting a 25% reduction over the course of the year.
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5. Combat the effects of inflation
To manage inflation’s impact, Lupo advises consumers to scrutinize everyday expenditures by comparing prices, utilizing sales and coupons, lowering thermostat settings, buying in bulk, and curbing purchases until prices stabilize.
Additionally, WalletHub provides ten more recommendations for financial resolutions in 2025, such as promptly paying bills following paycheck receipt, ensuring sufficient insurance coverage for unforeseen events, safeguarding personal identity, improving financial literacy, and even seeking new job opportunities.
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“Prioritizing financial literacy and cultivating healthy financial habits, such as paying bills immediately after payday, can lead to a more secure financial year ahead,” Lupo concluded.
