Financial Resolutions for 2024
The start of a new year is an ideal time to set financial goals. Maybe you're aiming to save more money this year or are prioritizing paying off debt. If you made financial goals for yourself last year, how did you do? Did you stay on track, or is there room for improvement in the new year?
Whatever you're dreaming of for 2024 and beyond, here are some financial resolutions to consider to help you get there.
1. Save More Money
Did you splurge during the holidays? Or maybe you want to boost your savings. Whatever your goals may be, setting aside a portion of your income is a crucial step toward building wealth over time. Here are some ways you can start saving more effectively to get back on track financially:
- Create a budget: Begin by tracking your income and expenses to better understand your financial situation. Then, create a budget that allocates a portion of your income to savings. Start by saving a modest percentage of your income, or around 20 percent is a good goal.1 You can gradually increase your savings as your financial situation improves.
- Automate your savings: An easy way to save money is to set up automated transfers to your savings or investment accounts. This allows you to save consistently without spending your money impulsively.
- Set up an emergency fund: Having cash set aside for emergencies can help you better manage unforeseen expenses, such as unexpected car repairs, loss of income or medical bills. Aim to save at least three to six months' worth of living expenses. Even if your income is limited or irregular, setting aside a small amount of savings each month can help you build a more comfortable financial cushion.
- Contribute to your 401(k): You can save even more money by taking advantage of 401(k) matches through your job. The first step is to maximize your account contributions, which vary from year to year.
2. Pay Down Debt
Debt can be a significant hurdle to your financial goals. Whether you've accumulated a small amount or are facing a significant challenge, now's the time to devise a strategy for paying it down. Consider which of the following strategies might be a good fit for you:
- Prioritize high-interest debt: Start by paying down debts with the highest interest rates, such as credit card debt. Be sure to continue making minimum payments on others. This can help save money on interest in the long run.
- Set realistic goals: Establish achievable targets for reducing your debt. This may include making monthly payments over the minimums or creating a timeline for becoming debt-free. Having clear goals will keep you motivated.
- Refinance or consolidate: If you have multiple high-interest loans, consider consolidating or refinancing them into one with a lower interest rate. This can make your debt more manageable and cost-effective. Making timely payments can also repair or improve your credit score.
- Eliminate credit card debt: If your debt includes credit card payments, you may want to try a few different strategies, like paying more than the minimum amount, wiping out your smallest debt first, prioritizing the card with the highest interest rate first, or automating your payments to avoid late fees. Once your credit card debts are paid down, consider paying off your credit card every month to avoid going into debt again in the future.
3. Spend Less Money
The start of a new year is a great time to identify areas of your budget where you could be more disciplined and spend less. To reduce discretionary spending, identify those unnecessary expenses and take steps to eliminate them.
For example, would the money that goes toward your daily coffee be better spent elsewhere? Or maybe you're subscribed to unnecessary streaming services. You can also audit your other plans, memberships, and subscriptions, and cancel anything you don't need.
When shopping, you can also consider using coupons or price alerts to help save money. Before purchasing groceries for the week, make a list of only the items you really need before entering the store, and avoid grocery shopping when you’re hungry.
4. Review Your Long-Term Financial Strategy
Consider the financial goals (or life goals) you wish to accomplish one, five, and even ten years from now. Those might include saving for retirement, buying a house, or paying for your child's or grandchild’s college education. Once you've solidified your goals and established a strategy, be sure to review them at least once a year to ensure you're still on track. You may need to revisit your strategy sooner if your financial situation or circumstances change.
Whether your goals include saving money or solidifying your long-term financial strategy, let’s continue to work together toward your desired future. Contact the office today to set up a time to discuss your financial health in the new year.
1) Pant, Paula. "How much should I save each month?" TIAA, https://www.tiaa.org/public/learn/personal-finance-101/how-much-of-my-income-should-i-save-every-month#:~:text=mean%20saving%20longer.-,At%20least%2020%25%20of%20your%20income%20should%20go%20towards%20savings,you%20to%20budget%20your%20money.
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