As the new year is here, taking proactive steps to improve your financial health can set the tone for long-term success.
Dr. Ferdous Ahmmed, assistant professor of finance, economics and risk management at Missouri State University, provides practical strategies for saving, investing and boosting your income. Implementing them will lead toward building wealth and achieving financial stability.
Save like a pro: 2025 edition
Saving is about consistency and clarity.
“Start by creating a realistic budget that tracks your income and expenses. This will help you identify areas where you can cut unnecessary spending,” Ahmmed said.

Automating your savings is another powerful move. For example, set up monthly recurring transfers to a savings account.
“This ensures consistency and removes the temptation to spend,” Ahmmed said.
To stay motivated, establish specific goals, such as building an emergency fund or saving for a major purchase.
Investing is your ticket to building wealth
Investing wisely can seem daunting. Ferdous stresses the importance of starting with your financial objectives and risk tolerance.
“Diversification is key,” he said. “Spread your investments across asset classes like stocks, bonds and mutual funds to reduce risk.”
He also suggests taking full advantage of tax-advantage accounts.
“If you haven’t already, contribute to a 401(k) or Individual Retirement Account (IRA). If your employer offers matching contributions, make the most of it — it’s essentially free money.”
For those new to investing, he recommends starting with index funds and exchange-traded funds (ETFs).
Index funds track a stock market index like the S&P 500, allowing you to invest in many companies at once and distribute risk. Similarly, ETFs are baskets of investments, such as stocks or bonds that trade on the stock market like individual stocks. They offer diversification, affordability and the flexibility to buy and sell throughout the day.
“These are low-cost and straightforward, making them ideal for beginners,” Ahmmed said. “Remember, investing is a long-term game. Stay consistent and don’t let market fluctuations deter you.”
Side hustles and pay bumps
Looking to earn more in 2025? It is worthwhile exploring various avenues to boost your income.
“Freelancing or taking on part-time work allows you to monetize your skills,” Ahmmed said. “Additionally, upskilling or earning certifications in high-demand areas can increase your earning potential in your current role or open doors to new opportunities.”
He also points out the benefits of passive income.
“Consider renting out a spare room, starting a small side business or investing in income-generating assets. These streams can provide financial stability over time.”
Paying attention to inflation
If inflation declines in 2025, your disposable income may stretch further. Use this increased purchasing power wisely.
“Focus on paying down high-interest debt,” he said. “This frees up future income and strengthens your financial position.”
He also advises against lifestyle inflation, which means attempting to spend more when things feel affordable.
“Maintaining disciplined spending habits will benefit you in the long run,” he added.
Maintaining financial fitness
Improving financial health requires setting clear and actionable goals.
“SMART goals — specific, measurable, achievable, relevant and time-bound — are essential,” Ahmmed said.
For example, instead of a vague goal like save money, set a goal to save $6,000 within 12 months by putting aside $500 each month.
Building an emergency fund is another critical step.
“Aim to have three to six months’ worth of essential expenses saved,” he said. “This acts as a financial safety net for unexpected events.”
Finally, he recommends safeguarding your future with adequate insurance and a solid retirement plan.
“Ensure you have health, life and disability coverage,” he said. “And consistently contribute to retirement accounts like a 401(k) or IRA to secure long-term financial stability.”
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