Preparing Financially for 2024

01/22/2024

There’s never a bad time to organize your finances, but January seems to motivate us to get organized for the year ahead. Below is a baseline list to help you prepare financially for 2024.

1.       Figure out your average monthly expenses. See a list of expenses HERE from my budget template, as some are easy to forget. If you pay for expenses annually (e.g. car insurance, home insurance, etc.) or quarterly (e.g. water bill), figure out the average monthly cost.

2.       Get rid of any expenses that you don’t need anymore (e.g. subscriptions).

3.       Save at least 3 months of expenses in a high yield savings account or money market account. If it gives you peace of mind to save a bit more, that’s fine.  

4.       If you have a 401(k) or other employer sponsored plan that offers a match, contribute the amount that allows you to take full advantage of the match.

5.       Pay off debt, not including your mortgage, via the debt snowball method. This means paying off your debts from smallest to largest, using each payment for the paid off debt to pay off the next debt faster.

6.       Depending on your income/tax situation, contribute monthly to a Roth IRA, Traditional IRA and/or increase your 401(k) contributions. After paying off debt, contribute 15% of your gross income to your retirement accounts. Talk with me about which methods will specifically benefit you the most.

7.       Review the funds within your current investment accounts to make sure they are poised for the most growth possible while still being diverse and meeting your risk tolerance. I will gladly review this for you. While you can allow your employer to select your current investments and future investment allocations on your behalf, many times there are better options available if you customize your allocation. Reallocating your investment accounts can make a huge difference in how your account performs over the years.

8.       Pay off your mortgage faster, and save more in your checking/savings accounts! Never assume your life circumstances will stay the same forever. The more you prepare, pay off debt, invest and save now, the more likely you will have less to be concerned about later.

*This is not meant to be an exhaustive list. This is simply a baseline to follow. Please talk with me about your specific situation. I never charge for meetings or advice; I only get paid directly from accounts that I manage.