Budgeting 2025 Interest Earnings –Average rate 4.00%
By Joe Rulison, Executive Chair and Co-Founder
Last December I delivered my 2025 outlook. So far, most of the points I had outlined are spot on, including the rising price of eggs. Going forward, you should be more assured in the recommendations I made a few months ago.
As you budget for investment income for your 2025/2026 budget, the average rate of 4.0% would be a good estimate, especially based on the lingering effects of inflation.
Despite short-term rates coming off a high of over 5.0% in 2024, the ability to generate more income over 2025 is possible. Here are three simple steps to follow:
- To generate more revenue, follow the data and capture every dollar of liquidity that you have on hand. Doing that can lead to over 30% more income over last year.
- Have a time-horizon schedule on all cash so you know what you need and when you need it. The smart strategy is to leave all cash invested until you actually need it, not when you think you might need it.
- Accurate benchmarking on marketplace rates is essential in order to have confidence that you are earning the most appropriate level of return on your cash.
Earning 4.0% or more on all cash in 2025 will allow you to offset the effects of inflation and ease stresses on your upcoming budget.
