Happy Holidays

As the holidays approach, it’s a natural time to pause and take stock, not just of the markets, but of our progress for the year. The year’s end brings both opportunity and distraction. Markets hit new highs, expenses rise, and our attention scatters between celebration and responsibility. That’s why now is the perfect time to check your balances: both in your portfolio and your priorities.

Smart investors don’t chase the noise; they focus on steady progress and their investing plan. They review, rebalance, and then recommit to their goals by upping their efforts to convert today’s income into tomorrow’s freedom. Wherever you are on your financial journey, take a moment this month to look forward and vow to create the best financial year possible.

Behavior Insight: Why We Do What We Do with Money

Ever wonder why some people start investing early and stick with it, while other people plan to “start soon” for years? It turns out, it’s not about intelligence or income, it’s about human behavior. A new 2025 study looked at how people make financial choices, even when using robo-advisors and apps that tell them exactly what to do. People followed through more often on good advice when the app explained the positive results they could gain, such as you’ll grow your savings, rather than the negative consequences they might avoid, like this action will prevent you from losing money.

This is a great reminder that how we talk to ourselves really matters. If your financial plan sounds like punishment (I can’t spend money on that), your brain naturally rebels. But if it sounds like you are buying freedom (I’m buying future freedom), you’ll stick with your plan.

Your Move: Reframe a money habit in a positive light. Instead of saying, “I have to save $200,” try, “I want to invest $200 to build my future dream life.” Behavioral science shows that this small mental shift can turn financial discipline from a burden into motivation. If managing money ever feels complicated and overwhelming, here’s a concept that simplifies everything called the One-Third Rule.

Behavior Insight: Avoid Overwhelm with a Simple Plan

A new 2025 study confirmed what many wise money managers already know, people who divide their income into three clear buckets are far less likely to end up in financial trouble. The breakdown you are looking for is simple:

• ⅓ for living (rent, food, daily expenses)

• ⅓ for saving and investing (retirement, index funds, and your future goals)

• ⅓ for debt and giving (paying down credit cards, student loans, or maybe helping others)

The concept does not give you perfect budgeting, but it does provide you with powerful psychological assistance. When your paycheck already has a plan, you spend with confidence instead of guilt.

Your Move: Look at last month’s income and divide it into three buckets—living, saving/investing and debt/giving. How balanced are they? If one bucket is overflowing, adjust a little. The goal isn’t perfection—it’s progress. Building awareness and making small changes helps you move forward without feeling overwhelmed.

Behavior Insight: Don’t Let Emotions Drive Your Future

Money decisions are rarely just about math—they’re about emotion. Fear, excitement, hope, and frustration can quietly steer our financial choices without us realizing it. When the stock market dominates the headlines, those emotions can take center stage, making calm decisions even more difficult.

Behavioral researchers recently confirmed what most experienced investors already know: when emotions rise, logical thinking drops dramatically. Investors who make decisions based on fear or hype often sell too early, buy too late, or freeze completely. But here’s the encouraging part, inner awareness changes your approach.The best investors don’t ignore emotions; they plan around them. They set up automatic transfers, stick to consistent investing schedules, and remind themselves that markets are powered by patience, and not panic or exuberance.

Your Move: Before making any financial decision, pause and ask, “Is this a fact or a feeling?” If it’s a feeling, take a breath. If it’s a fact, take action. That simple habit keeps emotions from steering your financial future off course.

Market Reality Check: Why Rebalancing Wins When Markets Soar

The headlines sound great: record highs, new peaks, everything’s moving dramatically upward. Now is exactly the time smart investors pause; not to panic, but to rebalance.

Rebalancing simply means bringing your investments back to your original mix of investments. If stocks have had a strong run, they probably now take up more space in your portfolio than you intended. Trimming a little by selling some stock and adding to your slower movers (like bonds/CDs or cash reserves) keeps your risk level steady and manageable.

Think of it like tightening the ropes on a sailboat —the goal isn’t to stop moving, it’s to stay balanced as the winds change. Financial markets move in cycles, not straight lines. They rise, they rest, and sometimes they retreat. Rebalancing helps you capture gains without gambling or guessing when the next up or downturn will occur.

Your Move: Check your current asset allocation this month. If your stock allocations were supposed to be 60% but have crept to 70%, consider shifting a small slice back. It’s not about timing the market — it’s about staying true to your plan while locking in some gains.

Bonus Season

If you will receive a bonus (or a raise) by the end of the year, decide how much of that amount you will spend on Christmas and how much you will move into your investment accounts. When you make this decision beforehand, even a small portion like 10–20%, you protect yourself from that “I’ll invest later” mindset. Once the money lands in your checking account, especially during the holidays, it tends to disappear forever. By moving part of it straight into your investments, before you spend it, you lock in progress without relying on willpower. The move saves you from temptation during our most emotional season. Small conversions of bonus monies and raises over the years add up to big freedom later.

Your Move: Before your next bonus check or raise arrives, write down the percentage you’ll invest. Set it up to move automatically if possible or make the money move right away before temptation sets in. Then enjoy the holidays knowing your future is already paid forward.

Have a Wonderful Holiday

The holidays remind us that life moves fast, the markets rise and fall, years blur together, and opportunities quietly pass by those waiting for the “perfect time” to save and invest. But freedom doesn’t wait for perfect conditions. It belongs solely to those who act now, invest with purpose, rebalance with courage, and relentlessly convert their wages into income-producing assets.

This season, give thanks for how far you’ve come, and recommit to the road ahead. Let gratitude sharpen your focus and fuel your next move. As Lisa and I say so many times, financial freedom doesn’t happen accidentally, it is a choice that requires intentional action.

~Larry & Lisa Faulkner