Women's Money Wisdom

Episode 303: Top 10 Money Trends and Stories that Shaped 2025 & What They Mean for 2026

• Melissa Joy, CFP® • Season 4 • Episode 303

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As we close out the year, Melissa Joy, CFP® steps back from the day-to-day headlines to examine the biggest money trends and economic stories that shaped 2025. Instead of reacting to weekly market noise, this episode offers a thoughtful top-10 look at the forces influencing markets, households, and financial planning — and what they may signal for the year ahead.

From the rise of artificial intelligence and shifting government policy to persistent affordability challenges and changing investment landscapes, Melissa breaks down complex topics with clarity and context. She explores how these trends showed up in real life for investors, savers, borrowers, and families — and why discipline and planning mattered more than prediction this year.

Throughout the conversation, Melissa connects the dots between policy, markets, and personal finance, reminding listeners that while we can’t control outcomes, we can control preparation.

Highlights include:

  • Why artificial intelligence became the dominant market and cultural story — and what it means for jobs, productivity, and energy demand
  • How tariffs evolved throughout the year and the real economic costs for consumers, businesses, and farmers
  • Key changes in the new tax law and why tax planning is becoming more complex, not less
  • The ripple effects of the prolonged government shutdown on workers, small businesses, and economic data
  • Why interest rates didn’t fall as much as expected — and how that impacted borrowers and savers differently
  • Persistent affordability concerns and the growing divide between households
  • The growing influence of private equity and private debt across the economy
  • Why markets delivered strong returns despite overwhelming negative headlines
  • How higher education and student loans are undergoing structural change
  • The broader financial implications of GLP-1 drugs and rising healthcare costs

As we head into 2026, this episode offers a grounded perspective on what really mattered in 2025 — and why staying focused on what you can control remains one of the most powerful financial strategies available.

The previous presentation by PEARL PLANNING was intended for general information purposes only. No portion of the presentation serves as the receipt of, or as a substitute for, personalized investment advice from PEARL PLANNING or any other investment professional of your choosing. Different types of investments involve varying degrees of risk, and it should not be assumed that future performance of any specific investment or investment strategy, or any non-investment related or planning services, discussion or content, will be profitable, be suitable for your portfolio or individual situation, or prove successful. Neither PEARL PLANNING’s investment adviser registration status, nor any amount of prior experience or success, should be construed that a certain level of results or satisfaction will be achieved if PEARL PLANNING is engaged, or continues to be engaged, to provide investment advisory services. PEARL PLANNING is neither a law firm nor accounting firm, and no portion of its services should be construed as legal or accounting advice. No portion of the video content should be construed by a client or prospective client as a guarantee that he/she will experience a certain level of results if PEARL PLANNING is engaged, or continues to be engaged, to provide investment advisory services. A copy of PEARL PLANNING’s current written disclosure Brochure discussing our advisory services and fees is available upon request or at https:...

SPEAKER_01:

Welcome to the Women's Money Wisdom Podcast. I'm Melissa Joy, a certified financial planner and the founder of Pearl Planning. My goal is to help you streamline and organize your finances, navigate big money decisions with confidence, and be strategic in order to grow your wealth. As a woman, you work hard for your money, and I'm here to help you make the most of it. Now let's get into the show. As we close out the year, I wanted to spend some time on an episode talking about money trends and top stories for 2025. I think having kind of a top 10 list for this episode is going to give us a deep dive into headlines. And frankly, I try to shy away from some of those headlines in the week to week when it comes to our conversations because so much is moving so fast. And also when it comes to money, headlines can often be a distraction and confusing. But if we take a full year and really look at the trends, I think that'll be helpful to kind of have a narrative and an understanding of what's going on in markets in 2025. So I hope you enjoy this conversation. So here's the top 10 list in no particular order, although I think number one really is the dominant story for 2025. And that is the rise and resilience of AI and artificial intelligence in stock market and frankly American culture themes today. So this was definitely a year, if you look, um AI is the AI story in mainstream culture goes back three years to November, December 2022. If you'll remember, we had a really tough year in stock markets, but um at that fourth quarter, there was um basically an announcement and um OpenAI basically gave us access to Chat GPT. And since then, if you look at the dominance of the Magnificent Seven stocks, stocks like Apple and Google, um Meta, um they have come to dominate um US stock markets. When you look at it, measured by the percentage these companies take up of the S P 500, they're now about 30% of companies. And some insiders say that you can attribute about three-quarters of stock market returns over the last three years, which have been um incredibly strong years looking since then to returns from artificial intelligence. And so we both see um we saw a really strong stock market this year. Um returns of the SP, as I'm recording in early December, are up around 17%. We've also seen um, you know, kind of the market really taking its cues from um news when it comes to deals and um agreements when it between companies with exposure to AI. And um what people predict is that we will continue to see um the immersion of AI um going into the future. There have certainly been announcements that there is going to be more and more investment into these, whether it's through data centers, um, company, companies putting part of their um budget and um into in their capital expenditures into investment in AI. And then we also have um you know kind of a drumbeat of what does this mean for um jobs. Will AI be replacing jobs? Is this a good thing or a bad thing? Um how will people graduating from college in years like this protect against um AI kind of coming for entry-level positions? And so I don't think we can ignore or hide from the fact that um we really have an AI tipping point where um labor productivity is being boosted in many cases by AI, according to research, but also um what does this mean for the humans and will we be left behind? Um so it's a story that is a very human story. It's also something that um we have some kind of secondary considerations. Um I've already talked about employment um concerns, um, but on the flip side, in a country which has previously relied on immigration and as well as um, you know, uh birth rates that were higher with lower birth rates and a regime that is much less open to immigration, um, perhaps we have a population that needs to be supported by this additional productivity. But something I haven't mentioned yet is that generative AI also creates a huge demand for power. Um, of course, there are environmental considerations when it comes to this. Um, US data centers um are anticipated that they'll use the electricity consumption of many, many cities. Um, growth in terms of energy demand um is not necessarily uh easy to predict as to how we're gonna get that growth because our um the US energy grid is um very old, hasn't been keeping up with modern times. Um so much to keep an eye on as we go. Um and will US consumers, you know, take on the burden of hiked energy prices? Um some say yes, and so um both. I don't think that AI is going away. And when we do our top 10 story for 2026, we may be revisiting the same conversation. Number two, especially in the first half of this year, um, were President Trump's tariffs. And um, and in the second half of the year, it's been accommodating um the impact or the economic costs of the tariffs. Um, so in the spring, we had tariff announcements. Um, if you'll recall, there was, you know, kind of a um hastily put together chart that just showed off the charts um increases to tariffs, and then there were deal-by-deal negotiations. And frankly, it is difficult to keep track at this point in time of where we are in terms of what tariffs are. What we do know based on federal custom duties and reporting is that um fiscal year to date as of the end of the fiscal year in the um fall that for the federal government that um tariffs have soared in terms of um revenue collected to about 195 billion. Now, that is not three, four, or five times what the US was collecting in terms of tariffs in 2024 and prior. In fact, in 2024, tariffs were about 118 billion. Um, so this is not um that first chart where we were looking at 50, 70, 100% tariffs. Um, and that's why I'm saying it's really difficult to see how everything is settling out, set settling in. Um, there have been delays in certain enforcement of tariff, and also um there have been questions as to whether and how consumers are being hit by um the pricing on these tariffs. Um, I think that um most predictions say that US households, on average, will have um a higher burden in terms of increased prices that can create a um budgetary strain, and also still deals being announced. Um, one example this December was um about$12 billion in subsidies to farmers who have been very hard hit when it came to tariffs and just new trading partners excluding the US on things like soybeans. So um some revenue coming in, certainly other costs, whether it's to consumers or businesses, as well as a DBD for tariffs as well, where we'll have to wait and see how everything sorts itself out. Keeping with that government theme, number three is we had a brand new tax bill, the One Big Beautiful Bill Act, that was passed in July of this year. Now, um there was um everybody knew there was going to be change when it came to um tax legislation because the first um Trump tax legislation, the Tax Cuts and Jobs Act, was passed um during his first administration, and it was set and scheduled to sunset many of the things that were incorporated into that bill in what would have been the end of his um second term if he had served um in um quick succession, and thus there um was a known need for a new tax bill. Well, we've got that tax bill now passed um almost solely by Republican support. Um and this is extending a lot of the um details of the Tax Cuts and Jobs Act with a lot of new introductions, including lower, although not no taxes on tips, um overtime, as well as some tax breaks for those receiving Social Security. Again, it's not that you get no tax breaks or you pay no taxes when it comes to Social Security, but some um extra considerations for some of those people. There are also some changes when it comes to what you get in terms of tax breaks if you're doing a catch-up in your 401k plan if you're over a certain income. There's a lot of phase outs. What I will tell you is um, first of all, you can listen to our past episode on the One Big Beautiful Bill Act, but I'll also mention that taxes are not getting less complicated. There's so many phase-outs, there's so many inflation adjustments, which I think are important. There's so much to consider in terms of where your income lands from year to year, that the importance of tax considerations to everyday Americans and financial planners like me is only increasing. Um, so much to consider and think about when it comes to the new tax bill. And we'll continue to get used to it as we go through the first tax filing season for the bill this spring. Okay, one more um government mention for number four, we had the government shutdown, which was an extended and much longer than average, if you can call a government shutdown average situation. So this fall, we had the government set shut down for 43 days. Um, it is estimated by the small business administration that they were unable to deliver$5.3 billion in guaranteed capital to small businesses. Certainly a big impact for government employees who had to bear the brunt of um, in some cases, unpaid labor andor um layoffs, as well as all sorts of functions, including the access to government data when it comes to um, you know, the information that we use to figure out how the economy is doing. We had delayed employment numbers, um, delayed GDP numbers, and so um we'll continue to experience the ripple effects. And just in general, I think um that there is um less likelihood for cooperation and more divisiveness, as always, in Washington. So um, you know, to have three of the top four stories be about government, I think is um uh just the way that it is in America today. And number five um on our list is quasi-governmental, um, talking about interest rates. Certainly, President Trump is um very wary of the um current regime when it comes to the Federal Reserve. And in the spring, we'll have a new Federal Reserve chairman. Um, there are a lot of pokes and prods when it comes from the executive branch requesting lower interest rates. We have had lower interest rates this year, although people who predict um where interest rates would be would likely have predicted that rates would have fallen even lower. Um, what we've seen because interest rates have not been falling as much is things like the 30-year fixed mortgage staying persistently high, so still on average above 6%, um, and even higher than that for some of the year. Those of us who are borrowers who have um credit card debt, student loan debt have not had the relief that um you might have assumed we would have. Conversely, those who are savers, um, because shorter-term interest rates have fallen a little bit more, um, aren't getting paid as much on their cash. And so the yields that were five and in some cases even six percent on money markets are starting to fall. Um, that is something where people may want to start to consider um bonds instead of just cash, and they may have falsely piled too much into cash that should be invested for the longer term. So I anticipate that this um there will be an unwinding of some cash reserves. And certainly for those of you who are careful about your cash reserves, also some considerations for making sure that you're getting paid a good interest rate for your savings, um, you know, which now is in the range of I'd say three and a half to four percent instead of five or six, like I said before. So the number six theme, and one that I think every household is feeling in different ways, is um persistent affordability concerns. And um, for some, that affordability concern may be a feeling and not a reality, but for other households, those who are really living um without a lot of leeway when it comes to extra savings, you know, when you make a trip to the grocery store, things are more expensive. Um, there's persistent inflation when it comes to health care, persistent inflation when it comes to paying for childcare or any type of caregiving. Um, and just it is really tough for lower middle class and middle class families to find the dollars to kind of make it through. I think it'll be interesting to see what the impact is of the new tax regime that um does try to assist um with families at lower income levels. Um, but will that be enough? And just um one of the most important things to consider, even though um inflation has gone back into a range um of you know about 3%, 3 to 4%, um, not its lowest rate, certainly, but not nearly as high as we had in 2021, 2022, and 2023, is that people intuitively think, oh, prices are going to go back to where they were. Um, but unless you have really intense um economic upheaval where there's a major recession, major unemployment, and you have what's called deflation, um, then that just isn't typically the case. The other thing is we just have this economy where those who are not, you know, kind of hooked up to the return train of the stock market and investment markets in general, um, are really finding it difficult to kind of get ahead. And so it's a case of the haves and the have nots, and there's very different outcomes for someone who's looking at inflation of three and a half to four, and maybe they're not getting cost of living adjustments in terms of their income, or if they are, they're not keeping up, versus those of us who have exposure to stock markets investments, and your retirement accounts are reaching all-time highs, um, your brokerage accounts may be reaching all-time highs. And so um, you know, unfortunately, we all see the um difficulties that these disparities reveal. And also, um, this is certainly a very like negative and pessimistic thematic um when it comes to how you see this kind of the state of affairs for America. So those are, you know, really difficult um considerations, and there is just a lot of um differences um that kind of increase the um major, major divides in terms of how every one of us sees the world. So a lot more division, can ongoing division, and um no relief in sight, unfortunately, um when you assess, you know, kind of how things went in 2025. Um, you know, even though we're reaching all-time highs in terms of markets, people are very pessimistic about overall economic health when it comes to the state of affairs in the United States. Number seven, I'll just mention um that there is more and more kind of influence from private equity and private debt in the country. So we know that stocks that trade on stock exchanges, those are publicly traded stocks. And a lot of the bonds that we purchase are financed through um traditional channels like banks, and those are kind of um corporate finance um less private. Um, and then we have this whole ecosystem of um financing through what's called private equity financing and private acqu capital from private equity that is um has growing number of companies that are big companies, but companies with huge revenue that are not choosing to go public and are held in private spaces. Um this is our number seven, private everything is what I called it. And when you um think about the story, um we understand private markets um just generally as a culture a little bit less, like how they're financed, how you make money. Um there's a ton of money going into these spaces, both through institutions as well as wealthy investors. Um, the a lot of the AI story is being financed by um private debt. So debt of non-banks being issued to companies to kind of keep their reporting to be um uh off the books and in some cases um not under the light of regulators. Um, and so this is an ongoing theme over the summer and fall. Um, the executive branch suggested that um they wanted um 401ks to have access to private um equity and private debt. Um, and so this theme is kind of spilling over into mainstream stories. Um, a lot of you may work for companies that are privately owned or financed um by private equity as well. Um, for small business owners, they may be um getting courted for offers to buy their companies by um private firms. I know we've had clients who have sold to private equity, and so this is certainly a theme that seems to be a decade-long theme, um, something we'll continue to talk about and is really important to be aware of. So I've gotten through this whole conversation um thus far, and I would mention um that we've also got to consider, got to consider um, you know, kind of what's going on when it comes to um your uh investment returns. Um and so in that case, um investments have been um uh a really strong story in 2025. And if you look back um on my list of the themes in um one through seven, you'd say, gosh, I see a lot of reasons to be kind of pessimistic. Like Melissa, that this must have been a horrible year. But if you're, you know, an investor, you're probably familiar that a lot of things, investment-wise, have made money using just kind of a list of some of the major asset classes that I follow. This again, I'm recording this in the first 10 days of December. Um, but bonds as measured by the bar cap ag are up over 6%. Um, and you can compare this to cash returns that are probably closer if you're really well invested in a high-yield savings of about um 4% or a little bit lower. Um, then looking at the S P 500 and most traditional way to measure US stocks were up over 17% year to date. Um meanwhile, small companies, which really had a rough start, especially with the tariff announcements, um, they are up about 14% year to date. And then finally, um, actually, international investments are much less exposed to kind of AI economies and AI growth stories. And yet, international investments, um, especially because they haven't had their day in the sun more recently, are up 29% year to date, trouncing US and giving um a welcome relief to someone like me who um believes in diversification when it comes to types of investments. So this has just been a year where you could think of a hundred different reasons for stocks to be lower and investments in general to be lower, a hundred reasons to feel like the glass is half empty, and yet, or a thousand or a million reasons, and yet um it is so difficult to take and extrapolate from headlines and know what's going on when it comes to results in markets. And so um I always say that it is a futile exercise to predict, and in fact, it often costs you. Um and this would certainly be a year where you could be easily thrown in the towel in April when stocks pulled back almost 20%, um, or March and April when stocks had a massive pullback after tariff announcements. And yet, you know, in it pays in many cases to be glass half full when it comes to investing. And in this year, in particular, in spite of those drawbacks, we had an aggressive um recovery and quick recovery, I should say, um, and um, you know, kind of extrapolating from headlines did not pay off and instead maintaining discipline did. So a couple more stories left that are kind of um on the outskirts of the economy, but I think are really important to note. First, um, in number nine is changes to higher education. Um so we've had um the Trump administration fighting with um institutions asking for payments. Um, we've also had changes to when it comes to student loans. It's less easy to get forgiveness, less repayment plan options. Um meanwhile, um student loans are about$1.7 trillion in the economy in terms of debt, um, second only to home mortgages in terms of what's on consumers' balance sheets. Um and we I just see a change when it comes to higher ed, um, where you really need to focus on the return on investment when it comes to education. Um, and you know, this is how many of us build our human capital is educating ourselves. Um, and so it's going to be really important to be careful in considering um what careers to pursue when it comes to next generations, um, and just something to keep an eye on when it comes to, you know, kind of results and outcomes over time, um, because higher ed is a huge part of the economy. I probably am biased because I live near the University of Michigan, so it's a huge employer in our local area, um, but lots of changes going on when it comes to higher ed. And the number 10 theme for 2025 um is the ongoing disruption that's coming from GLP1 drugs. Um, so more and more people are using these GLP1s. Um, uh, but I decided to include this in my story um for several reasons. First, um, not just GLP1s, but um kind of specialized and more expensive healthcare um discretionary choices. Now, I'm not debating the value of addressing weight concerns or diabetes, things like that, um, but just um uh treatments that cost more are more and more something that we plan for with clients. And so making sure that you plan for your healthcare costs, know that those costs tend to run in advance of inflation at higher inflation rates. All of these things are important to consider. Um, also, though, interestingly, um, and we'll have to talk about this on a future episode, maybe with a psychologist, um, but I had a client who's on GLP ones to manage weight, who mentioned how they had um a change in their spending patterns because of the GLP ones. And I think um there are at least early anecdotal um evidence that it much like people's um addiction patterns may be interrupted by use of these novel drugs, um also there may be a change in terms of um spending behaviors where um toward healthier spending or um more controlled spending behaviors um coming with these. But I think um one of the things I always like um to remind people is um economic stories hit in two different ways. First, certainly um, you know, uh dining establishments are changing the way they offer things, and drinking establishments are changing the way they offer their menu because of the disruption of these drugs. But also people will need to um plan for their spending on them. And certainly there could be an advantage to funding an HSA, so you get a deduction um from for some of these the spending, depending on how the economic arrangement is is. So just a lot of persistent changes. Um, and when you look at that top 10 list, I like to kind of have some takeaways from there. I think number one, what I would say is that financial planning really matters and um investment discipline isn't going anywhere. So 2025 was a year that rewarded you for investment process, for um thinking long term and not short term, um, and just investment discipline. And I think um that is an age-old piece of advice, but um no exception to 2025. Number two, I think that complexity is not going away. There are so many dynamic stories and so much changing in terms of the way the world works, and it's really critical to see um and understand this without being overreactive. Um, but like for example, the new tax law has so many different parts of it. Um, and your your um income may change from year to year as well. Um, and so um the value of someone who can kind of cut through the noise to tell you what's going on for your circumstances, someone um who does the work similar to what I do, um, continues to be so critical. And number three, and I mentioned this earlier, but you cannot predict, but you can prepare. So, those of you who have a financial plan um have a toolkit to protect your human capital, to be prepared if there's a job interruption because of AI, um, to understand how taxes impact your overall financial situation. And while um we could have never, you know, exactly known how 2025 would unfold, and heck, it was a really um chalk full of headline and things to deal with type of beer. Um, I think that um understanding what's happening, having a narrative that's pragmatic, practical, that focuses back on what you can control, and um not relying on prediction, not saying I know I have a crystal ball, but do say that you use process and discipline in order to make your financial decisions really um continues to be rewarded. I can't wait to talk to you into 2026 to see what themes unfold. And in the meantime, wishing you happy holidays and have a great um start to the new year. Thanks.

SPEAKER_00:

Thank you for listening to the Women's Money Wisdom Podcast. If you found value in this episode, the best way that you can support the podcast is to forward an episode to a friend or leave a review. Go to proplan.com and the podcast link to get all the resources and links mentioned. This presentation by Pro Planning is intended for general information purposes only. No portion of this presentation serves as a receipt of or a substitute for personal investment advice from Pro Planning or any other investment professional of your choosing. Copies of Pro Planning's current rent and disclosure brochure and from CRS discussing our advisory services and fees are available upon request or on our website platform at proplan.com. The information that we share is meant to educate and inspire, not serve as personalized financial advice. Everyone's situation is unique, so be sure to consult with your own financial professional for guidance that fits your life. And just so you know, the opinions shared in this podcast are Melissa's own and those of her guests. They don't necessarily represent any organizations with which Melissa is affiliated. For more important disclosures, please go to our webpage at proplan.com.

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Melissa Joy, CFP

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