Uncertainty in the markets due to economic fluctuations, rising inflation and shifting global markets present unique financial challenges and opportunities whether you’re a seasoned investor, just starting to build your portfolio or looking for long-term stability.
Understanding how to adapt to the current landscape is crucial. Here are some key financial strategies to help you weather the storm and thrive in today’s economic environment.
■ Diversify your investment portfolio. While equities are the go-to investment for growing long-term wealth, consider various asset classes including stocks, bonds, real estate and even commodities.
■ Build an emergency fund. Keep 3 to 6 months worth of living expenses in a readily-available liquid account in case of job loss, unexpected expenses or market declines.
■ Minimize debt and avoid high-interest loans. Higher interest rates make borrowing more expensive. Whether it’s credit card balances, student loans or mortgages, focus on reducing high-interest debt. Paying off high-interest loans will improve your financial health by reducing the total amount of interest you pay over time. Look into refinancing your debts if your current rates are higher than what’s available on the market.
■ Review and adjust your budget. Start by tracking your discretionary spending where a few tweaks can make a big difference. Determine if nondiscretionary costs such as groceries, rent and utilities can be trimmed down. Tracking your spending and adjusting your habits can help you allocate more funds toward savings and investments.
■ Take advantage of tax-advantaged accounts. One of the most effective ways to build wealth over time is by utilizing tax-advantaged accounts. Retirement accounts like IRAs or 401(k)s allow you to defer taxes on contributions, while their Roth counterpart allows tax-free withdrawals in retirement including growth on these accounts. Consider maxing out your contributions and take full advantage of employer-matched contributions when available.
■ Focus on long-term goals, not short-term hype. Although it can be tempting to chase short-term gains or follow the latest trends, investing with a long-term perspective is often more rewarding. Stick to your investment strategy, focus on your financial plan and avoid making emotional decisions.
In 2025, flexibility is more important than ever. The financial landscape is constantly changing, so be adaptable to make the most of opportunities that arise.
Do you need to adjust your investment strategy? Do you need to find new sources of income or cash flow? Be prepared to pivot your financial plan as necessary.
Build a solid financial foundation, diversify your investments, minimize debt and stay adaptable so you can be resilient with your financial strategy during uncertain times.
Wendy Bennett is a senior financial adviser at Bennett Associates Wealth Management in Butler. Bennett Associates is a registered investment adviser and does not provide any legal, accounting or tax advice. The material prepared is the opinion of the author and for informational purposes.
