The beginning of 2025 has been quite tumultuous, with numerous challenges such as tariff threats, federal job cuts, and persistently high prices for essentials like food, gas, and housing, all contributing to a dip in consumer confidence.
If you kicked off the year with high hopes only to find yourself feeling uneasy now, it’s time to transform that anxiety into proactive measures. Spring, with its symbolism of renewal, offers the perfect opportunity to reassess and revitalize your financial goals set at the year’s start.
Here’s where you might want to direct your focus:
- Review Your Spending
Your spending habits over the last few years might have been on quite the rollercoaster ride. For instance, data from the Federal Reserve Bank of St. Louis revealed a dip in spending on travel and dining out during the pandemic, with an uptick in purchases from grocery stores and beverage outlets. Post-pandemic, however, saw the rise of "revenge spending" as individuals indulged in travel and dining once more. Fast forward to January 2025, and consumer spending has taken another dive, as reported by the Bureau of Economic Analysis. As Shea Newton, a certified financial planner and president of Financial Journey in Pensacola, Florida, notes, "People seem to be holding back on spending to see how the new administration’s policies unfold."
- Find Easy Cuts
Those recurring expenses can be sneaky drains on your wallet, so reevaluating them is always a good idea. If there’s a streaming service you rarely use, consider canceling it and see if you even notice its absence. Similarly, a switch to a more cost-effective cellphone provider could save you money if it offers the same coverage. On the credit front, especially if your card comes with an annual fee, it’s wise to periodically assess its benefits. Curtis Bailey, certified financial planner and founder of Quiet Wealth Management in Cincinnati, recommends checking last year’s spending summary and rewards to see if a different card might better align with your current financial habits.
- Check In on Financial Goals
Your financial priorities can shift considerably from month to month. "Finances is one of those areas with often a dozen decisions needing attention simultaneously," explains Andrew Mitchell, a financial advisor with Fiduciary Financial Advisors in Grand Rapids, Michigan. When it comes to significant goals, Mitchell advises planning beyond the immediate future, considering what you’ll need in the coming years. This forward-thinking approach helps ensure you’re prepared, no matter the economic situation.
- Ensure Adequate Insurance Coverage
With natural disasters having impacted several states last year, many are still grappling with the financial consequences. Noah Damsky, founder and wealth advisor at Marina Wealth Advisors in Los Angeles, suggests reviewing your homeowners insurance policy every few years. Rising costs of labor and materials have made home repairs significantly more expensive. After purchasing his house in 2020, Damsky recently re-evaluated his coverage, aware of his proximity to L.A. wildfires. It’s also wise to shop around for insurance options that might offer better terms. If you’ve acquired new valuable possessions, such as jewelry or art, updating your policies to cover these is essential.
