Smart Money Moves for a Prosperous 2024: Your Financial Action Plan
BY ANDREA BEREZNAK
As we step into the new year, many of us brim with the possibility, promise, and energy of a fresh start in our financial lives. Whether you are looking to pay off debt, build wealth, or save for a significant goal, having a clear, simple plan is key. In this blog, we will outline some smart money moves that can help you achieve prosperity in 2024 and any year in the future.
Review and Update Your Budget:
Start the year by revisiting your budget (or creating it if you do not yet have one). Review bank statements to ensure you have a good pulse on your monthly income, expenses, and savings goals. Adjust based on changes in your financial situation such as a new job, increased income, or additional expenses. At the end of this exercise, ensure your expenses are lower than your income. Only then can you save toward your goals. Otherwise, you will be saddling yourself with more debt that you will have to repay (with interest) later. A realistic and up-to-date budget is the foundation for effective financial planning.
Emergency (a.k.a. “Life Happens”) Fund Reinforcement:
Life happens. Inevitably there will be a surprise this year you did not anticipate. That may be new tires for the car, replacement for a major appliance, or emergency travel due to an ill or ailing family member. Whatever it is, when you have a cash buffer in bank savings set aside, that surprise shifts from a devastating financial event to an inconvenience. Aim to have at least three to six months' worth of living expenses set aside in a liquid and easily accessible account. This financial cushion can provide peace of mind and protect you from unexpected expenses or job uncertainties.
Tackle high-interest debt aggressively. Whether it's credit card balances or other loans, focus on paying off outstanding debts to reduce interest payments. Reducing debt not only improves your financial health but also frees up resources for saving and investing. Borrow only what you have the proven ability to repay, and preferably only when you can use the funds to earn more than the cost of borrowing.
With your financial advisor, evaluate your investment portfolio to ensure it still aligns with your financial goals and risk tolerance. Diversify your investments across different asset classes to mitigate risk and consider the amount of risk that you are supremely comfortable taking. It is very tempting to ride the FOMO wave and get in on the latest hot investment buzzing about. Maintain a long-term view and avoid being swayed by election news, soundbites, and gossip. What matters overall is choosing diverse, proven investments that you will stick with, rather than bailing when the inevitable market downturns occur or public opinion shifts.
Maximize Retirement Contributions:
Contribute the maximum amount allowed to your retirement accounts. Take advantage of employer-sponsored plans like 401(k)s or contribute to individual retirement accounts (IRAs). The power of compound interest is significant over the long term, and maximizing your contributions can significantly boost your retirement savings.
Explore Additional Income Streams:
Diversify your income sources by exploring side hustle, freelancing opportunities, or passive income streams. This not only provides a financial safety net but also accelerates your journey towards achieving financial goals. If you cannot or do not want to add a second job, identify how you can increase your value to your current employer, implement the changes, and use those concrete examples to ask for a raise.
Review your risks and compare them to the insurance coverage you have, including health, life, and property insurance. Ensure that your coverage is adequate and up to date. Adjust your policies as needed to protect yourself and your loved ones from unforeseen and financially catastrophic potential events.
Establish Good Habits and they Establish You:
Dedicate time to implementing the above strategies. Schedule and honor monthly appointments with yourself during which you evaluate where you stand in each of these areas and adjust stay on track toward your goals. When your emotions run high or you are captured by a news headline or errant coworker’s opinion, return to these financial principles and a long-term view to stay grounded and steady in your pursuit of financial success.
By implementing these smart money moves, you can pave the way for financial prosperity in 202 and beyond. Remember, financial success is a journey that requires discipline, planning, and adaptability. Stay committed to your goals, regularly reassess your financial plan, and be prepared to adjust as needed. Here's to a financially prosperous year ahead!
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The content in this article was prepared by the article’s author. Cetera Advisor Networks, LLC does not endorse its content, and the views expressed may not necessarily reflect those held by Cetera Advisor Networks, LLC.