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2024 Is Here - Tips for Setting and Sticking with your Financial Resolutions

January 05, 2024

The new year inspires a lot of people to implement better financial habits, but maintaining those positive changes can be an uphill battle. The new year brings a fresh start to your budget. It’s a great time to look back at your financial habits from 2023 and find where you can make improvements. Make 2024 the year you finally take control of your financial life. Use these tips to set sustainable financial goals for more peace of mind in 2024. 

Gather the Facts

Before you do anything else, you need to know how much money is coming in and how much is going out each month.

For people who receive a regular paycheck, estimating the amount of money coming in is as simple as calculating your post-tax income. But for anyone whose income varies throughout the year, things can get much more complicated. A relatively safe way to budget with an irregular income is to use the lowest-earning month from the previous year as a baseline for creating a budget. A less secure, but probably more realistic way to budget, would be dividing the last year's income by 12 and using that number as your monthly budgeting baseline.

Once you determine the amount of money that is coming in, you need to know what you are spending on a monthly basis. Average the total amount of the money you spent monthly over as months as possible to create your average monthly expenses. Separate these average monthly expenses into two categories: needs and wants. Needs are bills you have to pay, like housing, food, insurance, basic utilities, minimum loan repayments, and transportation. Everything else is a want. Once you have a clear picture of how much is coming in and going out, you can start setting goals. 

Start a Savings and/or Investment Plan

  • Choose a specific savings goal, like adding to an emergency fund, saving for retirement, setting up a college fund for your kids or preparing for large purchases, like a car or a home.

  • Create a separate account for each goal and automate contributions to help resist the urge to halt savings during tight budget periods.

  • Saving for retirement as early as possible will make a huge difference down the road thanks to compounding interest. Start small by contributing at least enough to get a company match in your employer-sponsored retirement account. Remember that something is better than nothing, and you can always increase your contributions down the road. 

Avoid Borrowing Money 

  •  The cost of borrowing money is only getting higher. A great goal for 2024 is to avoid additional credit card debt and create a plan to pay off any existing balances.

  • Pick a strategy to attack any debt you already have. You can use the avalanche method, where you pay off the highest interest rate debt first, or the snowball method, where you tackle the lowest balance debt first. 
  • The advice used to be that you should always use cash when you shop, but cashback and other incentives from credit cards can make using them responsibly a great deal. Set up automatic payments each month to pay the balance in full and make sure you have enough cash to cover credit card purchases. 

Boost Your Financial Literacy 

  • Financial literacy in our country is at an all-time low, with 15% of Americans admitting that lack of financial knowledge has cost them more than $10,000. (Source: MarketWatch

  • When it comes to building your financial literacy, start with a small investment of time, like listening to one financial podcast a month or reading one article a week. 
  • We have educational resources on our website to help you get started. When you are ready for more personalized advice, reach out to us and we will pair you with one of our advisors. 

Tips for Sticking to Our Financial Resolutions

  • Write down your goals and create visual reminders that will help you track your progress.
  • You’re much more likely to follow through with your goals if you work with a trusted financial professional and/or have an accountability partner. They can check in with you, offer encouragement or advice when you’re struggling, and celebrate with you when you reach your goals.

Don't give up if your resolutions get a little off track throughout the year. Slightly adjusting your goals and celebrating even the small wins can avoid stress and frustration and keep you on the right path. Good luck and happy New Year!