Financial Freedom is The Greatest Goal For 2025

Put Financial Freedom at the top of your 2025 Wish List. As the holiday period closes it’s time to take stock. What did you get and give in 2024? Did you get everything you wished for? Did you give love, time and support to people and things that matter most to you? If not, now’s the time to turn the page on the calendar and make sure you give and get all that you hope to in 2025.

2025 Wish List

If you’re like most people, you may struggle to identify what you really need, what are the specific things that will best enable you to obtain your goals, whatever they may be.

If this sounds like you, then I advise you to answer this one simple question to get you focused:

What’s the most important thing money can buy?

When I asked my teen daughter this question she gave the top answers one would expect, a house, a car and food. But I urged her to dig deeper into what is really a main driver of happiness. There’s more too it than that.

Truth is, for most people, the single most important thing that money buys them is FREEDOM. Freedom of choice and a sense of autonomy have a very powerful positive effect on happiness.

Living a rich life may be determined by your lifestyle, not your bank balance. But that doesn’t mean money doesn’t matter.

Money definitely matters, as money is the means to financial freedom and security.

So when you’re writing your 2025 Wish List, be sure to have a financial plan that’s aligned to ensure you have the financial means to be free to achieve what you want this year.

Money is saved thought smart planning, simple spending and wise investing
Money, buys FREEDOM, which is the greatest gift of all
Freedom brings happiness…the ultimate goal

As you and I sit here in January, ask yourself what you can do today, to bring you one step closer to financial freedom. My family and I reached financial freedom in 2024, and what a milestone that was!! It allowed us to make big, bold moves – we quit our jobs, moved countries and traded in our desert life for a relaxing beach lifestyle. We couldn’t be happier. And we couldn’t have done it without being focused in previous years on how much we needed saved, how we would invest to reach that number and how we’d still have enough to have a lot of family adventures along the way.

2025 Action Plan toward Financial Freedom

Here’s an action plan for right now, January 2025.

Focus on developing good money habits. Developing positive money habits can help you build a better future..
Set your Short Term Goals. Short term goals can include things like paying off your debt, buying a used car, planning a wedding, putting a down payment on a house, savings for college education or an annual vacation. With the exception of college education for your kids, which could be a ways away, most of these goals should be things you’re looking to achieve in the next 5 years.
Make a Plan to Pay off any outstanding debt (it’s likely delaying your potential retirement by years!). In the meantime, call your credit card provider to see if they will reduce the interest rate on your credit card balance, it can’t hurt to ask!
Look for quick ways to improve your bottom line. Check your credit card statements and look for all your recurring payments. There are likely plenty you have forgotten about, and no longer need.
Figure out your Financial Freedom Number. It’s critical to determine how much money to save so that you don’t run out after you stop working, but you don’t work any longer than you need to!
Keep your investing simple and consistent. Stocks and bonds are more volatile than cash, but they increase your chances of growing wealth in the long term: Resist the urge to hoard your long term retirement funds away in a bank account. Over the last 100+ years, stock have returned on average 4-5% more than cash and bonds about 2% more. Over time, these increases are significant!
Invest your year end bonus. If you’re one of the estimated 40% of employees eligible for an annual bonus, invest it wisely! On average, bonus pay amounts to around 11% of salary – which is a significant sum! Make the most of every dollar by doing the following in this order:
Spend 5 minutes a day on your finances , about half an hour a week, 2.5 hours a month, 30 hours a year. If you work a standard 40-hour work week, 35 minutes is just over 1% of the time you spend earning money. Investing a small amount of time reviewing your finances will pay BIG dividends!

A Quick Annual Review of Your Finances

The start of the year is the perfect time to log into your retirement and investment accounts and check your overall asset allocation: how much is invested in stocks, how much in bonds, and how much in cash? The U.S. stock market is up about 30% for the year, as of late December 2024. And it has nearly doubled in the past five years!

That means if you have just been letting your long-term investments ride, you could have too much invested in stocks. Depending on how hands-off you have been, your 60% allocation to stocks could now represent 70% or so of your overall portfolio. Is that aligned with your risk profile and retirement plans? Or would it make sense to reduce your stock allocation? Make sure your current asset allocation is in sync with the risk you are comfortable with going forward.

» MORE: Learn more money management insights and tips about building wealth and your rich life at liverichly.blog

LIVE RICHLY. FIND HAPPY.

Kathleen McDowell is an investor, writer, and money coach. She shares how to build wealth and reach financial freedom for the sole purpose of having the ability to live a rich life ON YOUR OWN TERMS and SPEND TIME ON WHAT MATTERS MOST.