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How will holiday shopping impact the economy?
The National Retail Federation predicts that winter holiday sales will reach almost $1 trillion in November and December, but how will that impact the economy? The rate of spending growth is expected to be about 2.5 to 3.5%, that's the slowest jump since 2018. LiveNOW's Christina Evans discussed holiday spending and the economy.
LOS ANGELES - Americans are approaching 2025 with a renewed sense of financial optimism. A recent survey conducted by Bankrate found that 44 percent of Americans believe their finances will improve in the coming year, up from 37 percent last year.
This uptick in confidence comes as inflation continues to cool and wages begin to catch up with rising costs. However, challenges like high-interest debt and lingering inflationary pressures remain significant hurdles for many households. According to the survey, paying down debt has emerged as the most popular financial goal for Americans entering the new year.
Why financial goals are a priority for Americans
Financial experts suggest that the economic landscape has shifted slightly in favor of consumers. Inflation, while still present, has eased significantly compared to its peak in 2022, and the Federal Reserve’s efforts to stabilize prices have shown results.
Mark Hamrick, Senior Economic Analyst at Bankrate, notes that while inflation has moderated, it remains a significant factor affecting personal finances. He emphasizes the importance of addressing high-interest debt, as average credit card rates are above 20%, nearing record highs.
However, high-interest rates on loans and credit cards have made managing debt more critical than ever. Experts like Hamrick emphasize that setting financial goals is key to navigating these challenges.
Paying down debt: The most popular financial goal for 2025
According to Bankrate’s findings, 21 percent of Americans have made paying down debt their primary financial goal for the year. This focus is particularly pronounced among older generations: 26 percent of Gen X and 25 percent of baby boomers cite debt reduction as their top priority, compared to just 9 percent of Gen Z.
Hamrick notes that tackling high-interest debt can provide immediate financial relief, especially as average credit card rates remain above 20 percent. For many, reducing debt is the first step toward achieving broader financial stability.
Tips to achieve financial success in the new year
Based on expert recommendations, here are some practical ways to work toward your financial goals in 2025:
- Assess your finances: Start by creating a comprehensive budget to understand your income, expenses, and areas where you can cut back.
- Prioritize high-interest debt: Consider strategies like the debt avalanche method to pay off accounts with the highest interest rates first.
- Increase your income: Explore opportunities for side gigs or part-time work to supplement your earnings.
- Build an emergency fund: Setting aside money for unexpected expenses can prevent future debt accumulation.
Financial planners also advise regularly reviewing your goals and adjusting your plan as needed to stay on track throughout the year.
Overcoming challenges like inflation and interest rates
Although inflation has moderated, it remains a concern for 44 percent of Americans who believe their financial situation won’t improve this year. Additionally, the Federal Reserve’s high-interest rate policy has made borrowing more expensive, further complicating financial planning for many households.
Experts stress the importance of addressing these challenges strategically. By focusing on debt reduction and maintaining a disciplined approach to spending, consumers can better navigate the evolving economic landscape.
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