Year in Review: 5 changes that affected your money in 2025
2025 is about to come to a close, so it’s a good time to look back at how the year affected your wallet. Most of the changes weren’t sudden. Instead, they showed up gradually due to factors like income adjustments and rising everyday costs. Here’s a recap.
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Social Security Increased, But Not Much
The 2025 Social Security COLA was 2.5%, which meant that the average Social Security retirement benefit increased by about $50 per month or around $600 for the year. According to the Social Security Administration, even though the COLA was higher at 3.2% in 2024, it has averaged about 2.6% over the last decade. By comparison, the COLA was 8.7% in 2023 and 5.9% in 2022. The COLA is meant to help beneficiaries keep pace with living expenses. According to the 2024 Elder Index, the national average cost for a single homeowner in good health without a mortgage is $2,099 to cover food, transportation, health costs, housing and miscellaneous expenses. The SSA estimated the average monthly Social Security retirement benefit in January 2025 at $1,976 — a $123 shortfall.
Marketplace Health Coverage Causes Sticker Shock
Open enrollment for health care coverage started on Nov. 1, and without congressional action, current premiums will double next year for the average subsidized enrollee, per an analysis by the Kaiser Family Foundation. Medicare beneficiaries also saw higher costs in 2025, with increases to both the Part B monthly premium and the annual deductible. Dental, vision and hearing were still not covered by traditional Medicare, and medical bills remained a common reason for debt.
Grocery Prices Remained High
While some food-at-home categories declined in price at points during 2025, others continued to rise, according to the USDA Economic Research Service. For example, from July-August 2025, food prices rose higher than inflation and beef, veal, other meats and fresh vegetables had large price increases. Over the entire year, the USDA projected that prices for beef and veal, eggs, nonalcoholic beverages and sugar and sweets would rise more quickly than their 20-year historical average growth rates.
Electricity Prices Surged
Electricity costs have been rising steadily for the past five years, but the pace accelerated in September. The average residential power price jumped 7.4% in September to over $0.18 per kilowatt hour, which is the biggest surge in two years, according to U.S. Energy Information Administration data. Rising fuel costs and increased demand from industrial users and data centers are part of the reason prices have been on the rise. Additionally, natural gas — the main source of U.S. electricity generation — saw prices in September that were 30% higher than a year prior.
Borrowing Continued to Be Expensive
Higher interest rates slowed debt payoff and increased total repayment costs. The average credit card rate on accounts that carried a balance ranged from about 21.9%-22.8% during the first three quarters of the year, according to Federal Reserve data. Auto loan financing also remained costly. The most recent Federal Reserve data shows a 7.5% finance rate on 48-month new auto loans.
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