Personal Finance

Here’s what should be on your financial to-do list for 2025, advisors say

Published

3 days ago

December 30, 2024

Business Finance News

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When it comes to financial resolutions, paying down debt is at the top of many to-do lists for 2025.

But financial advisors who work with clients every day have their own wish lists for what they think should be top financial priorities for 2025.

Here are some tips covering everything from budgeting to estate planning from experts who are members of the CNBC FA Council.

“Start slow and manageable with any new financial goals,” said Lee Baker, a certified financial planner and founder, owner and president of Claris Financial Advisors in Atlanta. “You’re better off getting some wins under your belt than trying to build Rome in a day only to end up frustrated.”

Make sure your budget aligns with your goals

A new year is a great time to revisit where your money is going.

“A little bit of time spent on understanding your actual spending and then deciding if it lines up with your goals and values is time very well spent,” said CFP Jude Boudreaux, a partner and senior financial planner with The Planning Center in New Orleans.

Ask yourself if your spending aligns with your goals and values and if it should continue, he suggested. Once you sit down and look at the numbers, it can help identify where you might want to make changes.

Bringing awareness to your spending can help ensure that you’re making the most of the money you’re taking in, advisors say.

“Mindful spending that reflects personal values can lead to greater satisfaction and stronger relationships,” said Rianka Dorsainvil, a CFP and founder and senior wealth advisor at YGC Wealth.

Evaluate where you can cut back on spending

While credit card debt has climbed to record highs and consumers still contend with higher prices, it’s a great time to streamline your spending.

The new year is also a good time to review your credit and debit card statements for the year, said Ted Jenkin, a CFP and founder and CEO of oXYGen Financial, a financial advisory and wealth management firm based in Atlanta.

Look for subscriptions, apps and memberships you don’t use and cancel them, he said.

Also be sure to take a look at how much you’re paying for streaming services, and where you might be able to cut back, Jenkin said. Multiple streaming service subscriptions can now add up to more than a cable bill. Families may save by cutting the number of subscriptions or by having multiple family members on one account, he said.

Also be sure to take a look at grocery bills and the tendency to add spontaneous purchases that can add up, Jenkin said.

Create a personal investment policy statement

When the market inevitably has ups and downs, the temptation is to react.

But research shows the market’s worst days are often closely followed by the best days. If you sell during a market drop, you’ll miss the upside.

By creating a personal investment policy statement, you can avoid reacting to what’s happening in the market and instead stay focused on your goals, said CFP Carolyn McClanahan, founder of Life Planning Partners in Jacksonville, Florida.

For example, an investor with a long time horizon before retirement may choose to allocate 80% of their portfolio to equities and the remaining 20% to fixed income. When the market drops or soars, they can choose to rebalance back to that 80% equity allocation rather than give in to the temptation to react to the latest moves, McClanahan said.

Emotion-proof your portfolio: Here's what to know

Try to negotiate a higher salary

The start of a new year usually provides an opportunity to meet with your supervisor or boss to discuss your achievements and value to your team and company, said Cathy Curtis, a CFP and the founder and CEO of Curtis Financial Planning, a fee-only financial planning and investment advisory firm.

Before that meeting, research your market value and determine what salary or other compensation you want to ask for with a clear, concise pitch on why, Curtis said.

Also be sure to evaluate whether your work may be more highly rewarded elsewhere, she said.

Make sure your estate plan is up to date

One area of financial planning that people tend to avoid is estate planning, according to Louis Barajas, a CFP, enrolled agent and CEO of International Private Wealth Advisors in Irvine, California.

For anyone who has young children or who owns property, it’s particularly important to make sure you complete your estate plan, Barajas said.

Notably, estate planning does not necessarily have to be expensive, he said. For people who have financial situations that are not complicated, there are good online estate planning resources that help prepare wills, trusts, powers of attorney and guardian nominations for minimal costs.

Proper estate planning can help ensure your wishes for where you want your money to go are honored when you die. Importantly, that should also include your digital assets, said CFP Preston Cherry, founder and president of Concurrent Financial Planning in Green Bay, Wisconsin.

“These areas require annual reviews to help account for life and money milestones and adjustments in your value system,” Cherry said.

Set time to meet with family to discuss money

More than half of Americans — 56% — say their parents never discussed money with them, according to a recent Fidelity survey.

To get a family money conversation going, it helps to set a formal time to discuss the topic.

Lazetta Rainey Braxton, a CFP and founder and managing principal of The Real Wealth Coterie, recommends scheduling at least two multigenerational family meetings per year to discuss intergenerational wealth.

Possible topics that could be discussed include financial resolutions, long-term care needs for older generations and the status of estate planning documents.

If married, make your spouse a priority

A successful marriage is often a predictor of personal happiness, said Tim Maurer, a CFP and the chief advisory officer at SignatureFD, with offices in Atlanta and Charlotte, North Carolina.

If you have a spouse, investing more time and money in your marriage will pay off, he said.

Start with open money conversations, where both spouses answer the questions “What’s working?” and “What could work better?” Maurer said.

It also helps to have weekly standing meetings to discuss calendars and budgets, where you can identify any adjustments that need to be made, he said.

Be sure to create a new budget category that is kept sacred for date nights, and strive to schedule that time together weekly, Maurer said.

Identify key financial deadlines — and start early

Whether it’s getting your tax return in before April 15 or a required minimum distribution before Dec. 31, it helps to get started well before the deadline.

“Think about all the things that come up over the course of the year and plan for it early,” said Baker of Claris Financial Advisors in Atlanta.

“Avoid waiting until the last minute,” Baker said. “You and your advisors will benefit.”

Consider gifting money now

For people who are retired or close to retirement and who have the means, it can make sense to give away money to loved ones now rather than wait, said Boudreaux of The Planning Center in New Orleans.

It provides an opportunity to identify the family’s values, and direct money in alignment with that purpose, Boudreaux said. For example, that could include financial help for adult children who are raising grandchildren now, he said.

In 2025, the annual gift tax exclusion will go up to $19,000 per recipient. However, individuals can still make gifts over that amount by filing a gift tax return with the IRS and counting it against their lifetime gift tax exemption, which will be $13.99 million in 2025, Boudreaux said.

Notably, direct funding for education is not subject to gift tax limitations, he said.

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Personal Finance

Here are steps you can take to avoid overspending next holiday season

Published

2 days ago

December 31, 2024

Business Finance News

Ezra Bailey | Stone | Getty Images

Opening presents during the holidays is of course a lot of fun. But for many, opening those credit card statements will be just the opposite.

Months before the holidays hit, consumers were already bracing for the anticipated costs.

More than half of 2024 holiday shoppers, or 55%, felt stress at the costs associated with the season, according to a survey conducted online in September by The Harris Poll on behalf of NerdWallet.

Still, 32% of consumers thought it was important to purchase holiday gifts and experiences to show their love for family and friends, despite the expenses, the survey found.

“The holidays are hyped 24/7 for weeks before the actual days,” said Carrie Rattle, a financial therapist in New York. “This builds a level of almost manic euphoria and gives us permission to ignore a spending plan, achieve instant gratification and worry about the aftershocks later.”

Those aftershocks are likely being felt right around now.

To that point, 10% of holiday shoppers this year were considering tapping their emergency savings for gifts, according to NerdWallet. Meanwhile, 9% said they’d prioritize their gift purchases over debt payments or other bills. (Some 2,000 adults ages 18 and older were polled.)

To avoid overspending during the holidays, people need to plan ahead and create a spending budget, experts say. There are steps you can take now to avoid a repeat next year.

Plan ahead and ‘bookend your shopping time’

It’s best to start thinking about big purchases, such as for the holidays, “when you are calm and rational,” Rattle said. That will likely be far in advance of when those events take place.

“Before the tide of emotional shopping overtakes you, know what you want to spend,” Rattle said.

This way, you can also take your time deciding what gifts you want to get people and to research the costs.

It can be a good idea to save throughout the year for the holidays, said Kristen Euretig, a certified financial planner and founder of Brooklyn Plans.

“You can simply set aside a monthly amount to a dedicated savings account and reserve it for holiday expenses,” Euretig said.

Starting early will also allow you to take advantage of different sales that pop up throughout the year, Euretig added.

Rattle recommends people make a list of the gifts they want to buy far in advance, and then space out their purchases to avoid breaking your budget.

“Buy once a week,” she said. “Bookend your shopping time by having an obligation before shopping, and right after your targeted completion time.”

“When you control your purchasing time you also control browsing,” Rattle added.

You can also be on the lookout for which of the gifts you bought people were actually put to use, she said.

“Reflecting on this helps you realistically separate what is truly valued by the receiver,” Rattle added.

Don’t miss these insights from CNBC PRO

Personal Finance

5 advisors offer important tips for managing your money in 2025

Published

2 days ago

December 31, 2024

Business Finance News

Personal finances are top of mind for many households as they get set to ring in the new year.

About 38% of Americans ranked financial stability as their No. 1 focus area for 2025, according to a recent Allianz Life survey.

CNBC reached out to certified financial planners on its Financial Advisor Council to list their top resolutions for households as they look ahead to the coming year.

Here’s the financial advice they offered.

Kamila Elliott, Co-founder and CEO of Collective Wealth Partners

Kamila Elliott, CFP, is co-founder and CEO of Collective Wealth Partners in Atlanta.

Kamila Elliott

Create and stick to your budget! Max out on retirement contributions and create one personal financial goal such as paying off credit cards or investing an additional $100 a month in an investment account.

Barry Glassman, Founder and president of Glassman Wealth Services

It starts and ends with knowing where the money is going. I encourage people to track their spending for a period of time, maybe going back to three months’ worth of credit card and Apple Pay payments. It’s incredible what behaviors will change once people just know the truth.

Marguerita Cheng, CEO of Blue Ocean Global Wealth

Courtesy Marguerita Cheng

I’m going to say estate planning. It’s important for everyone to address — even for an 18-year-old heading off to college in Fall 2025. I had my daughter complete a health care and financial power of attorney before I sent her off to college.

If people feel overwhelmed with the estate planning process, I remind people that it’s a process. Start with a financial and health care power of attorney.

You can then focus on beneficiary designations. Next, a will and trust, if the trust is appropriate for your situation. This process also helps individuals track down retirement plans from former employers. Estate planning is a wonderful opportunity to revisit life insurance as well.

Lee Baker, founder, owner and president of Claris Financial Advisors

1. It’s not a popular subject but take the time review all your insurance coverages:

Auto and home in particular have jumped significantly for many people. Don’t forget about disability and life insurance. As long as you can get up and earn a living, you can replace your car or rebuild your home. What happens if you can’t generate an income?

Why so many young adults are still living with their parents

2. Spend some time reviewing your tax strategies and retirement planning:

Required minimum distributions: Do you ‘need’ them? Would making Qualified Charitable Distributions improve your overall picture?
Tax loss harvesting: Here’s an opportunity to improve your overall portfolio performance.
Employee benefits: Are you fully taking advantage of a health savings account (if available) and retirement plan contributions?

3. Review your cash flow:

If you spent more than you should have over the holidays, now is a good time to make a plan to get rid of that financial hangover as well as making a plan to avoid it next year. Take a look at your personal interest rate environment. We have gotten a few rate cuts from the Federal Reserve so far. There may be more but either way take stock of your situation.

Cathy Curtis, founder and CEO of Curtis Financial Planning

1. Automate savings:

One of the best features of company retirement plans such as 401(k) plans and 403(b) plans is that the contribution amounts are automatically taken out of a person’s paycheck each month, and then the funds are automatically invested in a pre-selected selection of funds.

Since it’s important to save outside of retirement as well for other goals, setting up an automatic withdrawal from a checking account to a savings or investment account is a smart move. First step is to determine how much to save each money based on cash flow and then set up a monthly or quarterly transfer. Once it is set up, it is out of sight and out of mind and the savings will grow.

It starts and ends with knowing where the money is going … It’s incredible what behaviors will change once people just know the truth.

Barry Glassman

Founder and president of Glassman Wealth Services

2. Manage overspending:

In order to get a handle on overspending, the first step is to identify the spending weaknesses. It could be household furnishings, electronic equipment, clothing, travel, or jewelry, etc. Then, write down how much was spent in the problem category. A good way to find the numbers is to look at the year-end credit card statements. Then, write down a number that is 20-30% below the amount spent in 2024 and make that a new budget and target for 2025. Track spending each month on a spreadsheet or app to keep the spending goal top of mind.

3. Stay invested no matter the headline news:

If the end of 2024 is any indication, 2025 is likely to be a turbulent year in the stock market. With a new presidential administration coming in, global wars, inflation and uncertainty around the projection of interest rates, that is much to worry about. But decades of history show us that the market will go up over longer periods and the smartest move a long-term investor can make is to keep investing and stay invested.

Personal Finance

As ETF assets top $10 trillion for first time, here are trends to watch

Published

3 days ago

December 30, 2024

Business Finance News

Pedestrians walk in front of the New York Stock Exchange, decorated with a giant U.S. flag, in New York City, Nov. 6, 2024.

China News Service | China News Service | Getty Images

Assets in U.S. exchange-traded funds in November topped $10 trillion for the first time, according to the latest data from Cerulli Associates.

ETFs — funds that invest in stocks, bonds or other assets and trade on national stock exchanges — reached $156 billion in flows for November, surpassing previous monthly flow records.

The activity is “on par with elevated activity typically seen toward the end of the year,” Cerulli reported.

Research from Morningstar pointed to a “Trump bump” that helped U.S. funds — including both ETFs and mutual funds — take in $115 billion in November, the highest total since April 2021.

As 2024 comes to a close, these are a few of the ETF trends that dominated the year, based on the latest data.

S&P 500 among 2024 fund winners

Year to date, the S&P 500 index is up almost 24%, as of Monday.

The S&P 500 rally, buoyed by the Magnificent Seven stocks — Apple, Microsoft, Google parent Alphabet, Amazon.com, Nvidia, Meta Platforms and Tesla — helped account for about half of the index’s gains for the year, according to data and analytics company VettaFi.

Four of the top 10 ETFs for 2024 by flows track the S&P 500 index, according to Cerulli.

The Vanguard 500 Index Fund ranks No. 1 for 2024 year-to-date inflows, according to Cerulli, followed by iShares Core S&P 500 ETF, iShares Bitcoin Trust, Invesco QQQ Trust, Vanguard Total Stock Market Index Fund, iShares Core US Aggregate Bond ETF, SPDR Portfolio S&P 500 ETF, Vanguard Total Bond Market Index Fund, Invesco S&P 500 Equal Weight ETF and Vanguard Growth Index Fund.

Malcolm Ethridge, a certified financial planner and founder and managing partner at Capital Area Planning Group, said he often uses S&P 500 ETFs in client portfolios because they allow for access to company names that would be in any large-cap growth strategy for significantly reduced costs.

While an actively managed fund may charge 50 or 75 basis points, a passive S&P 500 ETF may only charge 10 basis points, he said.

The S&P 500 index, which has had a record run, may be poised to continue to do well as the index rebalances to reflect current market leaders.

“I think this is a case where SPY [SPDR S&P 500 ETF Trust] probably outperforms the majority of fund managers in 2025,” Ethridge said.

S&P 500 could get close to 7,000 in the first half of next year, says Fundstrat's Tom Lee

Alternative ETFs see record growth

Meanwhile, alternative ETFs in November crossed $400 billion in net assets for the first time, according to Cerulli.

Moreover, the year-over-year asset growth rate for alternative ETFs — at 93% — was highest among all asset classes.

Most of the total alternative ETF market share — 80%, or around $325 billion — comprises digital assets, trading-leveraged equity and derivative income ETFs, according to Cerulli.

Financial advisors reported having just a 3.6% allocation to alternatives in 2024, though that is expected to increase, according to Cerulli. Within existing alternatives allocations, 14.4% is done through the use of ETFs, the firm found.

Crypto ETFs are ‘here to stay’

In January, bitcoin ETFs began trading on U.S. exchanges.

Now, spot bitcoin ETFs hold more digital currency than bitcoin founder Satoshi Nakamoto, VettaFi noted. Despite a “more lackluster” rollout for spot ethereum ETFs this year, crypto ETFs are “here to stay,” according to VettaFi.

The top five new ETFs by assets in 2024 are all bitcoin ETFs, according to Cerulli, based on data through November.

They include iShares Bitcoin Trust ETF at No. 1, followed by Fidelity Wise Origin Bitcoin ETF, ARK 21 Shares Bitcoin ETF, Bitwise Bitcoin ETF, and Grayscale Bitcoin Mini Trust ETF.