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For many people, a new year represents a new beginning and an opportunity to make a fresh start in various areas of life. This is also the perfect time to do a financial check. Consider creating and implementing a list of financial to-dos for the year ahead.
From taxes to asset allocation to estate planning, there are several areas to consider when it comes to wealth management, and once you get off track, it can be difficult to get back on track. Here are five steps you can take to maintain your financial health and keep that momentum going year-round.
1. Take time to evaluate your goals.
Start by putting pen to paper and planning your expectations for the new year. Or, if you’ve already done so, please revisit it. For example, if he wants to increase his savings account balance by $10,000 by the end of the year, think about what it will take to reach that goal. Do some simple math to see what your monthly budget will look like in 2024.
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When determining your financial goals, don’t just write down a few nice-to-haves. A long weekend away can give you the perspective and renewed focus you need to start creating a roadmap for the year ahead.
2. Focus on debt reduction.
No one wants to have unpaid debts. For a fresh start in 2024, strive to be debt free. Or at least try to pay off high-interest debts like credit cards and personal loans as soon as possible.
Once that’s done, you can reevaluate what your maximum debt is. For many people, this may be a mortgage. Certainly, refinancing is an option, especially now that mortgage rates are starting to fall.However, if you have extra funds on hand, consider a home loan recasting This means that you will pay the principal all at once. Doing so will reduce the interest you pay over the life of your loan and help you get out of debt faster.
Resolving financial debt can be difficult, but it is possible if you budget wisely. High-income earners above $160,200 may end up covering their full Social Security contributions early through payroll deductions. If you’re one of them, you can plan to save her 6.2% of your salary, the percentage you pay. was Payments to Social Security – to settle subsequent debts.
If you received a lump sum from inheritance or a bonus, it may be a good option to use it to pay off your debts. The benefits of investing in such a sudden windfall often cannot outweigh the risk of accruing unchecked interest.
3. Reevaluate your portfolio.
In case your financial situation continues to be volatile in 2024, make sure your portfolio matches your risk tolerance. For example, if your goal at the beginning of last year was to have an 80/20 portfolio by the end of the year (that is, 80% of your assets would be in stocks and the rest in fixed income assets), your could approach a 60/40 or 70/30 portfolio. As you head into 2024, you’ll likely need to reconsider your asset allocation to support your intended financial goals.
Next, consider any savings opportunities your employer may offer. For example, if you didn’t max out your annual retirement contributions from your company’s retirement plan (401(k)s, 403(b)s) last year, consider maxing out in 2024 . Remember to make the most of your profits. You can also share your plans.
4. Get a head start on your taxes.
Tax season is approaching. Looking back over the past year and preparing your return now will save you a lot of time and effort.
First, talk to your accountant to help you calculate your annual expenses. Be sure to track realized gains and losses from your investments and how they may affect your current income tax situation. Additionally, if you are enrolled in a simplified employee pension system and have not yet reached the maximum amount, you should consider contributing to it.
Now is also a great time to think about how to better prepare for your 2024 taxes. Start by finding a way to completely reduce your taxable income. For example, if you’re eligible to itemize your deductions, consider relying on charitable contributions. Additionally, if you have a large estate, you can work with your tax and legal advisors to consider gifting it to your children or grandchildren this year to reduce inheritance taxes.
5. Block out time for accountability.
Everyone has experienced something like this in one way or another. You start the new year with new resolutions and resolutions, but as the days pass, you gradually lose sight of your goals. That’s why you need effective ways to hold yourself accountable throughout the year.
The best way to do this is to set aside time each month on your calendar to evaluate your progress toward your year-end goals. That time should be shared with someone who will hold you accountable, such as a good friend, colleague, or lover. The most important thing is to listen to what the person has to say. Then up your stake by writing a check to the charity of your choice and giving it to that person. If you decline the financial check-in, the individual can mail the check to the charity. And if you stick to your financial goals throughout the year, the charity will give you that check back.
By taking the time to set financial milestones for 2024, you can end this year on a high note and position yourself to start 2025 on an even stronger note.
This article was obtained from external sources and provided courtesy of Stephen B. Dunbar III, JD, CLU, Executive Vice President, Georgia-Alabama Gulf Coast Branch of Equitable Advisors, LLC. It is not intended to be used or configured. It should not be relied upon as financial, investment, tax or legal advice. Your unique needs, goals, and circumstances require individual attention from tax, legal, and financial professionals, whose advice and services supersede any information provided in this article. Equitable Advisors, LLC and its affiliates do not provide tax or legal advice or services and do not endorse the accuracy, completeness, or appropriateness of any content linked from this article. , endorsement, or representation. Stephen B. Dunbar III is a member of FINRA, SIPC (his Equitable Financial Advisors in Michigan and Tennessee). He offers securities through Equitable Advisors, LLC (New York, NY 212-314-4600). , offers annuity and insurance products through Equitable Network, LLC. Financial Professionals may only transact business or respond to inquiries in states in which they are properly qualified. AGE-6174135.1(12/23)(exp.12/25)
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