Oftentimes, when we face too many tasks, we freeze and complete none of them. This is especially true when we aren’t quite sure which task is most important to complete first. Then nothing gets done.
But completing one task is better than completing none. When it comes to money matters, steady improvement wins the race. So, in 2024, instead of trying to do it all – just pick ONE to complete.
Here are 9 financial tasks to consider knocking out in 2024. Which one is best for you?
1. Track your spending using a software tool: If you don’t currently have a tool in place to track spending, consider implementing Quicken, YNAB, Mint.com, EveryDollar, Copilot.money, or your financial institution’s software. By tracking spending, you’ll begin to clearly see where you can reduce expenses and save more towards your goals. For example, are you wasting money on unnecessary streaming subscriptions?
2. Rebalance your investments to match your goals and risk tolerance: Start by assessing all your accounts holistically – or an overall allocation. But you should also assess individual buckets for specific goals. For example, if you’re saving for a home – that account may not be heavily invested in stocks if you plan to buy a house in the next 3 to 5 years. If you have 20+ years until retirement, your retirement accounts may be more heavily weighted in stock funds or ETFs.
3. Review your insurance policies: Look at insurance both ways: are you under-insured in some areas and over-insured in other areas? Can you lower your costs and not sacrifice much risk? If you have built up a healthy emergency savings, you can afford to choose higher deductibles so that your premiums on auto and home insurance will be lower. Do you have an adequate amount of life insurance?
4. Meet with a CERTIFIED FINANCIAL PLANNER™: for guidance and suggestions – Meeting with a CFP® is a great way to feel more secure in the decisions you are making. They can provide suggestions to improve your current financial situation or help put a plan of action together if you don’t know where to start.
5. Create a short-term savings plan to reach your goals: Once you have created a budget and know how much discretionary income you have left after expenses, you can create a detailed savings plan. Consider creating “buckets” (or separate savings accounts at your bank) for various short-term goals such as growing your emergency fund, purchasing a home, a car, vacations, unexpected repairs, or future investments.
6. Review fees and interest you’re paying banks, brokerage firms, mutual fund, and banks: Fees and interest costs can really add up. Are you getting the best deal on your credit card in terms of perks and points? Are you paying too much interest on any loans? Are you paying mutual fund companies fees unnecessarily? Review all your accounts and choose investment funds that have low expenses and consider re-financing loans if you can secure a better rate.
7. Review your Will and estate documents: It is a good rule of thumb to update your estate planning documents every three to five years, or if you have had any major life changes (such as having children) that need to be considered. If you haven’t already, establish a relationship with a trusted Estate Planning Attorney that provide guidance and draft the documents you need. Some of the documents you may need are wills, trusts, powers of attorney and advanced health care directives.
8. Review your long-term financial goals and make sure you’re saving and investing properly to reach those goals: If you have long term goals of ten to 20 years, choosing stock mutual funds or ETFs will typically provide higher returns. Decide what lifestyle you want in retirement and make sure you are on track to meet those goals. Take advantage of HSAs if you have a high deductible health care plan, and always make sure you contribute enough to your company 401k plan to maximize the match provided by your company. Then evaluate if the Roth or Traditional 401k makes the most sense for your personal tax planning.
9. Review your emergency fund to ensure it has enough to meet your needs: A good rule of thumb is to have three to six months of expenses saved in case of a job loss or a health complication that can affect your income. Put the emergency savings in a liquid high yield savings account that can be easily accessed within a day or two.
These topics are right in Tilly’s wheelhouse if we can be service. Contact us to get started.