My one-person company,
Money Talk (read: me), may be the only entity in the U.S. that does a generally
focused “deep dive” annual summary of personal finance research, events, and
trends. I recently presented a webinar for the Association for Financial
Counseling and Planning Education (AFCPE).
Why look back on the past year? For context and insights
about how to manage money during the year ahead. Below are ten data points that
caught my attention during 2025:
Affordability Crisis-
This was a key theme throughout the year as prices for many consumer “basics”
rose faster than household incomes. Examples include food, utilities, property
insurance, new and used vehicles, and housing.
Inflation Trends-
The Consumer Price Index (CPI) announced in January was 3.0%. It decreased for
three months (February-April) and then increased for five months (May- September). The CPI for the change in prices from November 2024 to November 2025,
announced in December, was 2.7%.
Interest Rates-
The Federal Reserve Open Market Committee (FOMC) held interest rates steady for
the 5th consecutive time in July at a range from 4.25 to 4.5%. This
was followed by three quarter point decreases in September, October, and
December to a range from 3.50% to 3.75%.
Credit and Debt-
Outstanding credit card balances increased to an all-time high and there was a
record-high percentage of credit cardholders making minimum payments. Another
first was credit cards with rewards payable in bitcoin.
Vehicle Purchases-
By Q2, seven-year car loans comprised 21.6% of new vehicle financing and
six-year loans, the most common loan type, 36.15%. For the first time ever, the
average price of a new vehicle topped $50,000.
Homeownership-
Mortgage interest rates decreased slowly from over 7% in January to about 6.2%
in November. Home prices hit a record high in June and started to decline. A
typical first time home buyer is 40 years old and there was an upsurge in the
use of adjustable rate mortgages.
Stock Investing-
The closing price of the Dow Jones Industrial Average (DJIA) on 12/31/24 was
$42,544.22. This was followed by a market correction during the winter months
and numerous fresh highs, especially in November and December after interest
rate cuts. Closing DJIA on 12/31/25: 48,063.29.
Income Taxes-
The IRS ended its experimental Direct file program as well as the ability to
buy paper-I-bonds with a tax refund. The OBBBA mega bill made tax rates and tax
brackets from the 2017 Tax Cuts and Jobs Act permanent and introduced several
“limited time offers” through 2028.
K-Shaped Economy-
Wealthy Americans boosted the economy. The top 10% of U.S. earners accounted
for almost half of all spending while low- and moderate-income households
struggled to make ends meet. Shopping at thrift stores increased as did smaller
package sizes of food and other items.
Legislative Changes-
Two impactful new laws were the Social Security Fairness Act, which repealed
the Windfall Elimination Provision and Government Pension Offset. Another was
OBBBA. 2025 also ended with 30 states mandating a personal finance course for
high school graduation.
For additional information about 2025 events, click here
for the slide deck for my recent webinar.
This post provides
general personal finance or consumer decision-making information and does not
address all the variables that apply to an individual’s unique situation. It does
not endorse specific products or services and should not be construed as legal
or financial advice. If professional assistance is required, the services of a
competent professional should be sought.
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