As the festive holidays come to an end, we look forward to the New Year. Welcome to 2024, the year in which setting financial goals will guide you toward reaching financial freedom. While everyone’s definition of financial freedom is unique, there are a few objectives that can give you a solid foundation for the New Year. Let’s examine a few Financially Savvy Resolutions that can guide you towards a financially successful year!
Create a Budget
Establishing and adhering to a budget over the holidays can be challenging due to the responsibilities of entertaining family members, making long trips, and purchasing gifts. However, establishing a budget to stay on track in the New Year can assist you in reaching your financial goals. One of the most utilized budgeting strategies is the 50-30-20 rule.
- 50% goes toward paying for necessities such as groceries, rent, and utilities.
- 30% is used to cover the cost of desired expenses such as entertainment, dining out, and shopping.
- 20% goes towards savings such as retirement accounts, major purchases, or an emergency fund.
Establishing an Emergency Fund
It’s important to be prepared for the unexpected as we begin the New Year. Establishing an emergency fund can assist you with managing any unforeseen events that may arise. It is encouraged to have adequate funds to cover three to six months’ worth of living costs when beginning your emergency fund. To get started, determine how much you will need to spend on housing, food, utilities, medical care, debt, transportation, and other essentials. If you have a sufficient emergency fund, you will be prepared in the event of an unexpected occurrence.
Pay Off Debt
Regardless of whether there have been instances of overspending in the past, let’s focus on the present. Debt repayment is an essential component to achieving financial freedom. Now that a budget has been created, you are able to determine where there is room to pay off debt. A few strategies that might assist in reducing your debt faster are as follows:
- The Debt Avalanche Method: eliminate your largest debt first, followed by the next largest, and so on.
- The Snowball Method: By paying off your lowest debt first, you may apply your previous payment to pay off your next biggest debt, and so on.
However, paying off debt in whatever amount is a success, regardless of the strategy that suits your circumstance.
Challenge Yourself to Save
Being able to save a little more money during the year is an incredible achievement, even though it is easier said than done. However, a few money-saving challenges might serve as a helpful guide.
- Monthly Savings Challenge: To begin, decide how much you want to save each year and divide that total by twelve. Then, save that particular sum every month, and you’ll have reached your goal by the end of the year!
- Weekly Savings Challenge: Set aside the amount designated by the year’s week number; for instance, save $1 during the first week of January. In the final week of January, set aside $5. You’ll have $1,378 saved at the end of the year, just in time for Christmas!
- Envelope Challenge: Collect 100 envelopes and number them from 1 to 100. Pick an envelope every day and place the amount inside it according to the number shown on the envelope. For example, put $20.00 in envelope #20, and so forth. You will have $5,050 saved by day 100!
It may be necessary to modify the challenge, depending on your particular goal. Whichever savings challenge you decide on, the key is to stick with it. This will help guide you on your path to financial freedom.
Save For Retirement
In the New Year, it is time to focus on a better financial future for yourself. To do so, let’s look at a few tips for setting your future self-up for financial freedom.
- Make the most of your 401(k): If you haven’t already, try to max out at $23,000 for individuals under 50 for 2024. An extra $7,500 can be contributed by those over 50. If you are unable to contribute the full amount allowed by your 401(k), try increasing your contribution by even 1% to start moving toward your target.
- Review your portfolio: You might have made some adjustments last year and are planning on making more this year. To ensure that your investments meet your goals, review your current allocations to determine if they align with your time horizon and risk tolerance.
Making decisions regarding beneficiary designations is important, but it’s also important to make sure these are current. Reviewing your life insurance policies, CDs, 401(k), IRAs, and other retirement plans should be a priority as we begin the New Year.
Protect Your Identity
In order to lower your risk of falling victim to identity theft, it is crucial that you always secure your personal information. Here are some guidelines to go by:
- Regularly review your account statements
- Review your credit report
- Avoid phishing attempts
- Password protect your devices
- Freeze your credit
Also, keep in mind that taking care of your emotional and physical well-being directly affects your financial well-being. Taking care of your well-being will enable confident and informed financial decisions. Making your money work for you starts with taking charge of your finances. Achieving your objectives is a little bit simpler when you have control over your financial security and stability. If you think that these resolutions are a good fit for you, then let’s get started right away!
About John G. Ullman & Associates, Inc.
John G. Ullman & Associates, Inc., was founded in Corning, N.Y. in 1978. The firm is a Registered Investment Advisor (RIA) registered federally with the Securities & Exchange Commission*. As an independent, fee-based investment management firm JGUA provides comprehensive wealth management strategies and services to their clients. The firm manages over $1 billion in client assets, with a staff of more than 75 employees over four locations, including Horseheads, N.Y., Rhinebeck, N.Y., Charlotte, N.C. and Corning.
If you are interested in learning more about how JGUA could help you, visit our website HERE, or call 1 (800) 936-3785. You can follow us on, LinkedIn, Twitter, Facebook, Instagram, YouTube and The JGUA Blog.
*Registration does not imply a certain level of skill or training