The battle to get here was certainly an uphill one, but people are generally feeling better about the economy and their finances than they once did. On top of that, the economy has been easing into an ideal, Goldilocks-like position — not running too hot or cooling too quickly.
Throughout 2024, consumer sentiment data showed people were fairly positive about the economy and their own finances, even if there’s remaining frustration over elevated prices compared to four years ago.
Looking ahead, households are feeling more optimistic about their personal finances in the next year, as the share of those expecting to be in a better financial situation a year from now hit its highest level since February 2020.
Combine positive personal vibes with a strong economic picture and it looks like 2024 wasn’t so bad for consumers, after all. But that doesn’t mean there weren’t bumps in the road or potential roadblocks ahead.
To cap off the year, NerdWallet writers reflect on the top trends in personal finance and the economy this year — and what they think might be ahead in 2025.
The economy steadily grew
Elizabeth Renter, NerdWallet’s economist
What happened: In 2024, U.S. consumers have proven resilient following a period of high inflation and ongoing high interest rates. Wage growth has been strong, owing in part to rising productivity. This has driven robust spending throughout the year, which has kept the economy growing at a healthy pace. The labor market has remained steady, though cooler than 2023, and price growth continues to moderate towards the Federal Reserve’s 2% inflation goal.
What’s ahead: Barring significant changes to economic policy and significant shocks, the U.S. economy is expected to grow at a moderate rate in the coming year. Inflation will continue to moderate and the labor market will remain relatively healthy, all due in part to continued slow and deliberate rate cuts from the Fed. However, there are risks to this path.
Higher tariffs and tighter immigration policies are likely, but the extent of these changes are yet unclear. The potential policy scenarios are many, and the economic outcomes complex. Increased tariffs are generally inflationary, and stricter immigration policies could impact the labor supply and economic growth. Consumers and small business owners with their eyes to the new year should focus on the things within their control.
Savings accounts offered high rates and returns
Margarette Burnette, consumer banking and savings writer
What happened: High-yield savings accounts and certificates of deposit offered elevated rates in 2024, rewarding savers with strong returns. Following the Federal Reserve rate cuts in the second half of the year, high-yield accounts had modest rate decreases, but they continued to outperform traditional savings accounts and CDs.
What’s ahead: We’re watching for further Federal Reserve rate cuts, which could lead to more decreases in savings rates.
Credit card debt hit a high
Sara Rathner, credit cards writer
What happened: Credit card debt levels hit record highs, with consumers turning to credit cards to pay for necessities. While the economy is doing well, many individuals have struggled to make ends meet, as incomes haven’t kept up with certain costs.
What’s ahead: We may see some policy and regulation changes with the incoming administration that could affect folks when it comes to credit cards, debt and consumer protections.
Small business boomed
Ryan Brady, small business writer
What happened: New businesses continued to blossom in 2024 as business applications remained well above pre-pandemic levels. Confidence in the future state of the U.S. economy also spiked after the presidential election, but that optimism was tempered by concerns over rising costs and labor quality.
What’s ahead: All eyes are on the incoming administration as small-business owners brace for turbulence resulting from potential tariffs, tax policy changes and dismantled government regulations. We’re also watching the possibility of interest rate cuts in 2025 and small-business owners’ growing reliance on new technologies, such as AI.
Home buying remained challenging
Holden Lewis, mortgages writer
What happened: Home buyers struggled with elevated mortgage rates, rising house prices and a shortage of homes for sale. On top of that, a new rule required buyers to negotiate their agents’ commissions.
What’s ahead: The Federal Reserve is expected to cut short-term interest rates, but mortgage rates might not necessarily fall by a similar amount. Buyers will probably have more properties to choose from, and the greater supply should keep prices from rising a lot. Interest rates on home equity loans and lines of credit should fall, making it less expensive to borrow to fix up homes — either to sell, or to make the home more comfortable and efficient.
The markets were a boon for investors
Sam Taube, investing writer
What happened: The stock market had a great year. The S&P 500 is up more than 25% due to falling interest rates, fading recession fears, AI hype, and the possibility of lighter taxes and regulations under the new administration. Cryptocurrency also saw big gains in 2024; the price of Bitcoin crossed the $100,000 mark for the first time in December.
What’s ahead: A lot depends on how fast the Fed reduces rates in 2025. Another key unknown is Trump’s second term. Regulatory rollbacks, such as those he has proposed for the banking industry, could juice stock prices — but they also could create systemic risks in the economy. His proposed tariffs could also hurt economic growth (and therefore stock prices). Finally, it remains to be seen whether trendy AI stocks, such as NVIDIA, can continue their momentum into next year. It’s the same story with crypto: How long will this bull market last?
Premiums went up for home and auto insurance
Caitlin Constantine, assistant assigning editor, insurance
What happened: Many people saw their home and auto insurance premiums skyrocket in 2024. In some states, homeowners are finding it harder to even find policies in the first place. Meanwhile, life insurance rates have started to decrease post-pandemic. We also saw more insurers offering online-only policies that don’t require a medical exam.
What’s ahead: Auto and home insurance costs will likely continue to rise, although auto premiums may not rise as dramatically as they have over the past few years. And if you’re in the market for life insurance, expect to see competitive life insurance quotes and more customizable policies.
Lawsuits and uncertainty over student loan relief continued
Eliza Haverstock, student loans writer
What happened: Borrowers received historic student loan relief, but lawsuits derailed an income-driven repayment plan used by 8 million whose payments are indefinitely paused. Uncertainty will carry into 2025 as a result of the presidential administration change.
What’s ahead: Trump has pledged to overhaul higher education and rein in student loan relief. The fate of the SAVE repayment plan, student loan forgiveness options, FAFSA processing and more remain in the balance.
Traveling in style was all the rage
Meghan Coyle, assistant assigning editor, travel
What happened: People are willing to pay more for big and small luxuries while traveling, and airlines and hotels are taking note. Many airlines raised checked bag fees early in 2024, credit card issuers and airlines invested in renovated airport lounges, and major hotel companies continued to add luxury properties and brands to their loyalty programs.
What’s ahead: Southwest will say goodbye to its open seating policy and introduce new extra-legroom seats, a major departure for the airline. Alaska Airlines and Hawaiian Airlines will unveil a unified loyalty program in 2025. Spirit Airlines may attempt to merge with another airline again after its 2024 bankruptcy filing and two failed mergers under President Biden’s administration. Travelers will find that they’ll have to pay a premium to enjoy most of the upgrades airlines and hotels are making.
Dynamic pricing expanded its reach
Laura McMullen, assistant assigning editor, personal finance
What happened: This year, dynamic pricing expanded beyond concerts and travel to online retailers and even fast-food restaurants. This practice of prices changing based on real-time supply and demand received plenty of backlash from consumers and prompted the Federal Trade Commission to investigate how companies use consumers’ data to set prices.
What’s ahead: Beyond an expansion of dynamic pricing — perhaps with added oversight — expect subscription models to become more prevalent and demand for sustainable products to grow.
The car market came back for buyers
Shannon Bradley, autos writer
What happened: New-car prices held steady in 2024 but remained high after a few years of sharp increases — the average new car now sells for about $48,000, and for the first time ever the price gap between new and used cars surpassed $20,000 (average used-car prices are now slightly more than $25,000). Overall, the car market returned to being in the buyer’s favor, as new-car inventories reached pre-pandemic levels, manufacturer incentives began making a comeback and auto loan interest rates started to decline.
What’s ahead: The future of the car market is uncertain and depends on policies implemented by the incoming administration. Questions surround the impact of possible tariffs on car prices, whether auto loan rates will continue to drop, and if federal tax credits will still be available for electric vehicle buyers.
Buy now, pay later grew in popularity
Jackie Veling, personal loans writer
What happened: Buy now, pay later continued to be a popular payment choice for U.S. shoppers, even while facing headwinds, like an interpretive ruling from the CFPB (which determined BNPL should be regulated the same as credit cards) and Apple’s discontinuation of its popular Apple Pay Later product. Large players like Affirm, Klarna and Afterpay continued to offer interest-free, pay-in-four plans at most major retailers, along with long-term plans for larger purchases.
What’s ahead: Though more regulation had been widely anticipated in 2025, the change in administration suggests the CFPB will play a less active role in regulating BNPL products. For this reason, and its continued strength in the market, BNPL will likely keep growing.
Inflation eased, finally
Taryn Phaneuf, news writer
What happened: Easing inflation was a bright spot in 2024. In June, the consumer price index fell below 3% for the first time in three years. Consumers saw prices level off or decline for many goods, including for groceries, gas and new and used vehicles. But prices haven’t fallen far enough or broadly enough to relieve the pinch many households feel.
What’s ahead: The new and higher tariffs proposed by the Trump administration could reignite inflation on a wide range of goods.
Rents were still high, but price growth slowed
Taryn Phaneuf, news writer
What happened: Rent prices remain high, but annual rent inflation slowed significantly compared to recent years, staying around 3.5% for much of 2024, according to Zillow, a real estate website that tracks rents. A wave of newly constructed rental units on the market seems to be helping ease competition among renters and forcing landlords to offer better incentives for signing a lease.
What’s ahead: If it continues, a softening rental market could work in renters’ favor. But construction is one of several industries that could see a shortage of workers if the Trump administration follows through on its promise to deport undocumented immigrants. A shortage of workers would mean fewer houses and apartments could be built.
Trump won the election, promised tariffs and deportations
Anna Helhoski, news writer
What happened: After a contentious presidential campaign, former President Donald Trump declared victory over Vice President Kamala Harris. While on the campaign trail, Trump promised to lower inflation, cut taxes, enact tariffs, weaken the power of the Federal Reserve, deport undocumented immigrants and more. Many economists have said Trump’s proposals, if enacted, would likely be inflationary. In Congress, Republicans earned enough seats to control both houses.
What’s ahead: It’s unclear which campaign promises Trump will fulfill on his own and with the support of the new Congress. He has promised a slew of “day one” actions that could lead to higher prices, including across-the-board tariffs and mass deportations. Most recently, Trump pledged to enact 20% tariffs on Canada and Mexico, as well as an additional 10% tariff on China. He has also promised to extend or make permanent the 2017 Tax Cuts and Jobs Act; many of its provisions expire by the end of 2025.
Congress squabbled while consumer-first, antitrust efforts won
Anna Helhoski, news writer
What happened: Fiscal year 2023-2024’s funding saga finally came to an end in March, then six months later, the battle to fund the fiscal year 2024-2025 began. The Biden Administration waged its own war against junk fees. Antitrust enforcers pushed back against tech giants like Amazon, Apple, Google, and Meta; prevented the Kroger-Albertsons merger; nixed the Jet Blue-Spirit Airlines merger; and moved to ban noncompete agreements. The Supreme Court rejected a challenge to the constitutionality of the Consumer Financial Protection Bureau, as well as a challenge to abortion pill access. SCOTUS also overruled its landmark Chevron case, which means every federal regulatory agency’s power to set and enforce its own rules are now weaker.
What’s ahead: The election’s red sweep means the GOP will control the executive and legislative branches of government. They’ll face the threat of at least one more potential government shutdown; a debt ceiling drama comeback; and the beginning of the debate over extending or making permanent provisions of the expiring 2017 Tax Cuts and Jobs Act.
The article What Trended in Personal Finance in 2024? originally appeared on NerdWallet.