- Review your long-term financial plan.
- It’s easy to get caught up in trying to cover day-to-day expenses and end up in credit card debt.
- If you’re finding yourself focused on the present, resolving to consider your long-term goals could be just the ticket to turn things around in 2024.Reviewing our budget and your financial plan to make sure they are on track to meet your long-term financial goals.Start with year-end statements provided by banks, credit unions, and credit card companies to see where your money is going and identify areas of overspending.
- After making sure you have a budget in place that prioritizes investing, maximize contributions to retirement plans such as a 401(k) or Roth IRA.
- Get started investing.
- If you’re just getting started, jump into the market in 2024 with a focus on investing for the long term.
- Aim for a distant goal like retirement or paying for a child’s college tuition.
- The important thing is simply getting started. With compound interest, your money will grow faster and faster over time, even if economic conditions make your start a bit rocky.
- Earn your employer match.
- If you didn’t take full advantage of your employer’s retirement plan in 2023, you missed out — and you may want to resolve not to make the same mistake in 2024.
- Cutting back on retirement investing and hoarding cash during times of economic uncertainty – is a mistake that can jeopardize your future financial security.
- You have just one chance to max out your employer match each year. And the matching funds your employer provides when you contribute to your 401(k) can provide as much as a 100% return if your company matches your contributions on a dollar-for-dollar basis. If you make just one financial wellness resolution this year, plan to not leave retirement money on the table.
- Be smarter with your cash.
- Since money market funds and banks and credit unions are paying extremely low interest, make sure you aren’t carrying more cash than you need right now. Also, look for alternatives such as savings certificates. They may be a better place to store your cash heading into next year, generate more yield, and leave you better off overall.
- Although you need to make sure your emergency fund is accessible in case of an unexpected expense, there’s nothing wrong with optimizing your savings and trying to earn a little better return on investment to help with your wealth-building efforts.
- Stay the course with your investments.
- For many investors, recent market volatility has been hard to handle. That’s why it’s so important to resolve to commit to your investment strategy and stick with it — even over bumps in the road.
- One resolution to set at the beginning of each year is to see if you can go the entire year without selling any shares.
- Approach each year with this mindset of avoiding selling, encourage yourself to think a little bit more about the stocks you want to buy, making sure that you’re confident in your analysis and commitment to owning shares for years as opposed to quarters.
- Commit to add to your favorite holdings as opportunities arise is a resolution everyone should consider adopting. After all, a buy-and-hold strategy has historically proven to be the best way to build wealth.
- Make tax-efficient investing a priority.
- With smart investing moves come profits — and taxes on those profits. But you can resolve to make smart moves that minimize the cut the IRS takes.
- Estimate gains and take the time to explore options to lower tax liabilities before the end of the year.
- Although thinking about taxes may not be at the top of your list of fun things to do, resolving to make 2024 the year you focus on tax-reduction efforts could help keep more of your gains in your pocket. If you aren’t sure where to start when it comes to tax reduction, a tax adviser can help.
- Start a healthcare savings account.
- If the COVID-19 pandemic has taught us nothing else, it’s that health risks can come out of nowhere. That’s especially true for seniors who are at an increased risk of ailments and who may be on a fixed income that can’t easily cover medical bills.
- Resolve to start saving for healthcare in 2024.
- While 401(k)s and IRAs are more widely known for retirement savings, not as many are prepared for health expenses. Saving for healthcare — now and into retirement — should be everyone’s New Year’s resolution.
- You need to have a qualifying high-deductible health plan to invest in an HSA, though. If you aren’t eligible, you can still create a dedicated savings account earmarked for medical expenses.
- Put your estate plan in place.
- Investing is about building wealth, but you’ll also want to make sure you have plans in place to protect the assets you’ve worked so hard to acquire. If you don’t already have an estate plan, you’re falling down on the job and should resolve to make one this year.
- Seventy percent of Americans don’t have a will. Having an estate plan is critical for helping you leave behind a legacy to your loved ones, as well as to the causes you love.
What goals should you set in the financial new year?
Each of these eight resolutions could help you to improve your financial wellness. But ultimately, you need to consider the state of your own finances when deciding what goals to set.
Whether it’s paying off a personal loan or credit card debt, improving your financial literacy, boosting your credit score, or becoming a better investor, you should set a goal you believe in and then hold yourself accountable.
If you set SMART goals — Specific, Measurable, Achievable, Relevant, and Time-bound — you can maximize the chances that you’ll actually stick to your financial New Year’s resolutions all the way to 2025 and beyond. Get started now so you can ring in the next new year by celebrating the financial progress you made all year long.
Roth Iras are offered by Wheatland FCU. Wheatland is federally insured by NCUA.
Investment services are offered by Concise Financial Advisement, a separate entity from Wheatland FCU
Source: The Motley Fool
Consult a tax adviser regarding deductibility and tax deferment.