If you want to look back on 2025 with great satisfaction, here are some financial moves you might make now or soon:
1. Get out of debt
It’s hard to get ahead if you’re paying 15% or 25% in interest while aiming to earn 8% or 10% on investments. So aim to get out of any high-interest rate debt as soon as you can.
2. Live below your means
Each of us should be living below our means – spending less than we bring in. The greater the difference between what you earn and what you spend, the more money you can free up for retirement savings or for your kids’ college educations or whatever is important to you.
3. Have an emergency fund
Unless you’re financially independent, you’ll want to have an emergency fund at the ready, able to cover at least three or more months’ worth of all nonnegotiable expenses (such as taxes, housing, food, transportation, utilities, etc.). You may not expect to be laid off or to face sudden huge expenses such as a big car repair or major surgery, but it can happen. If you have an emergency fund to tap at such times, you won’t have to break into savings or retirement accounts or take on any debt.
4. Rebalance your portfolio
We at the Motley Fool often extol the virtue of investing in great companies (or great and powerful index funds) — and then leaving those investments alone to grow over long periods. Legendary investor Warren Buffett, too, has said that his favorite holding period is forever.
Still, it’s sometimes smart to rebalance your portfolio….
