[ad_1]
It’s hard to believe another year has passed, but we’re already setting our sights on 2024. And with the arrival of a new year comes old and familiar resolutions. While fitness and organization may be at the top of your list, it’s also a great time to reevaluate your finances.
Experience has taught me that using checklists is an easy way to maintain financial discipline. This approach ensures that you consider all aspects of your finances, from setting achievable savings goals to creating a realistic budget. Below, we’ve put together a list to help you manage your finances effectively throughout the year.
January: Set goals
New Year’s resolutions always start with a goal, and financial resolutions are no exception. Start by creating a budget to get a clear understanding of your financial situation. Take a closer look at your cash flow and distinguish between essential expenses, such as groceries, gas, and utilities, and expenses that can be cut, such as frequent eating out or unused subscriptions.
If you haven’t already done so, now is the time to set up or adjust your IRA and 401(k) contributions. Whether you’re just starting to save for retirement or looking to grow your savings, a well-planned budget is the first step. Once you fully understand your expenses, decide on a specific amount or percentage of your income to invest each month. Remember, even small increases in the amount you save each month can make a big difference over time.
February: Simplify
Just as organizing your home might be on your to-do list for 2024, we recommend doing the same with your financial accounts. Don’t forget to read all your statements come tax season. Is your old 401(k) sitting idle? Consolidating your accounts is a good way to streamline your finances and ensure you have access to all your account information.
March: Get ready for tax season
It’s okay to fall off the beaten track in February. But now is the time to make sure your finances and records are in order for tax season. Note that his 2024 tax filing deadline is April 15th. Need more time to file your return? Consider applying for an extension to extend the filing date until October 15th. It is important to note that this is just a filing, not an extension of the payment deadline. He recommends that you file your tax return or extension return by April 15th, but no later than this date to avoid penalties.
If you’re expecting a tax refund, consider saving that money instead of spending it. If your emergency fund doesn’t have enough to cover the recommended three to six months of living expenses, add it to that account. If your emergency account is in good shape, consider investing your refund in an interest-earning account.
Also, don’t forget to contribute to your IRA and HSA. You must make your 2023 IRA and HSA contributions by April 15, 2024.
April: Review of debt
Dealing with debt can be a huge burden. If you’re expecting a tax refund, consider using it to pay off high-interest debt, such as credit card balances. This approach not only reduces your financial debt, but also reduces stress and potentially improves your credit score.
If you haven’t already done so, now is also a good time to check your credit score. Many credit card companies offer this service for free, but you can also get a free report each year from the major credit bureaus. It’s important to stay on top of your credit so you don’t have any mistakes on your report. It can also help you identify opportunities to improve your financial situation.
May: Focus on education
As the school year ends and you start thinking about summer, it’s the perfect time to consider education savings for your children and grandchildren. 529 plans are more versatile than ever, offering tax-free growth for a variety of education expenses, from traditional schooling to job training. 529 plans are a great way to grow your money tax-free while investing in the education of future generations.
June: Mid-year check-in
June marks the midway point of the year and is the perfect time to measure how closely you’re meeting your financial goals. Did you continue the course? Or have we gone off track? Take this opportunity to review the budget and goals you wrote down at the beginning of the year and adjust accordingly if your priorities change.
July: Founded for financial freedom
This month, which celebrates the country’s independence, is the perfect time to gear up for financial independence. Check your investment portfolio and asset allocation. If you’re working with a financial advisor, ask questions to ensure your holdings are well diversified and free of unnecessary overlap.
Summer can be a lot of fun, but it can also be expensive. Develop mindful spending habits so summer fun doesn’t derail your big financial goals.
August: Insurance renewal
As August arrives and the new school year begins, our lives often return to a more structured routine. This makes it an ideal time to bring in the same level of organization around financial matters, especially insurance. Take this opportunity to review and update your various insurance policies. Make sure your life, disability, home, and auto insurance is up to date and ready to meet your family’s evolving needs. If you haven’t taken advantage of discount programs like our great student driver discount, now is your chance.
September: Consider charity work
As September comes to a close this year, it’s a good time to reflect on your contributions to charity. Think about how much you’ve given to charity so far and what more you’d like to do by the end of the year. This way, when giving season approaches, you can allocate your resources effectively to ensure you reach your philanthropic goals for the year.
October: Updated online security
There’s nothing more creepy than a cybersecurity scam. As you start thinking about the end of the year, it’s wise to re-evaluate your online accounts and passwords. Be sure to use a strong, unique password for each account that includes a combination of uppercase and lowercase letters, numbers, and special characters. Updating your passwords regularly can greatly improve your online security.
November: Thinking about family
November brings us the holidays and family gatherings. The focus on family makes it an ideal time to address important financial issues. Consider reviewing and updating your estate documents, such as wills and trusts. It’s also a great time to have age-appropriate financial conversations with your kids and organize all important financial documents in one accessible place. These steps will help ensure your family’s finances are in order and you feel secure during the Christmas season.
December: Reflection and future prospects
As the end of the year approaches, it’s an ideal time to think about saving for retirement if you haven’t retired yet. Review how much you’ve put away in your tax-deferred retirement accounts over the past year and how much you can increase this by 2025. Even if you can’t do it right away, aim to save 15% of your salary (including employer contributions) by 2025. your retirement account.
If you’re turning 73 in 2024, now is the time to make sure you’re taking required minimum distributions from a Traditional, Rollover, SEP, or SIMPLE IRA. Also, check the provisions for inherited IRAs, no matter your age. Forgetting this can be costly.
Consult with your financial professional to consider recovering tax losses in your portfolio to offset your income taxes. This investment strategy attempts to lower your taxes for the current tax year by choosing to sell your investments at a loss.
Stay financially healthy all year round
Remember that it is important to always pay attention to your finances in order to achieve your goals. From setting clear goals in January to making wise decisions about his retirement in December, each step you take lays the groundwork toward financial security and freedom. Use this checklist as a guide throughout the year to stay on track. Also, remember that small, consistent efforts can lead to big gains in the long run. Let’s welcome a financially healthy and prosperous 2024.
Hilary Stoker, CFP, is Executive Vice President and Financial Advisor at CapWealth. For more information, please visit capwealthgroup.com.
[ad_2]
Source link
