As we approach a new year, it’s likely you will take some time in the coming week to reflect on the past year and think about what you’d want to do differently in the coming one. In this process, your financial habits and goals may garner your attention.
In fact, according to Forbes’ Health/One Poll survey, 38% of respondents said they would like to improve their finances in 2024, making it the second most common New Year’s Resolution (behind the sought-after goal of improved fitness).
Making resolutions, or setting investment goals, can really help you build a better financial future. Whether it’s achieving financial freedom, saving for a dream vacation, or finally getting rid of debt, here are four powerful financial resolutions to consider. These goals can guide you toward a more secure and fulfilling life in the year ahead.
1. Establish an Emergency Fund
Starting the New Year by setting up an emergency fund is a smart move for anyone aiming to bolster their financial security. This resolution involves committing to regularly set aside a portion of your income specifically for unforeseen circumstances – whether it’s a sudden medical expense, unexpected home repair, or a job loss.
Begin by setting a goal for your fund, aiming for an amount that is equivalent to at least three to six months’ worth of living expenses. To kick start the process, establish a budget that factors in regular contributions to the emergency fund, treating it as a non-negotiable expense. Consider opening a separate savings account specifically earmarked for emergencies, making it less tempting to dip into for non-emergencies. You can gradually build up this fund by allocating windfalls, bonuses, or any unexpected income toward it. Stay consistent, and stay patient, knowing that each contribution brings you closer to the security and peace of mind an emergency fund provides.
2. Implement a Debt Repayment Plan
Becoming debt-free in the new year brings a sense of liberation, releasing the burden of financial stress and offering the freedom to allocate income towards personal goals, rather than interest payments.
Crafting a debt repayment plan involves a comprehensive assessment of your outstanding debts, prioritizing them based on interest rates or emotional weight. It’s about setting achievable milestones and committing to a structured payment plan, whether it’s the avalanche method (targeting high-interest debts first), or the snowball method (starting with smaller debts for quicker wins).
Staying disciplined by allocating extra funds toward debt repayment, cutting unnecessary expenses, and possibly seeking consolidation or negotiating better terms are all strategies that can expedite this goal.
Creating and executing a debt repayment plan is about stepping into the new year with a lighter financial burden.
Related: How to Dig Your Way Out of Debt
3. Plan for Retirement
As the new year begins, planning for retirement is a forward-thinking resolution. It involves envisioning the kind of retirement you desire, and taking the concrete steps needed to achieve it.
Crafting a retirement plan involves assessing your current financial situation, setting realistic retirement goals, and determining how much you’ll need to save to meet those objectives.
Whether it’s contributing to an employer-sponsored retirement account like a 401(k), exploring Individual Retirement Accounts (IRAs), or diversifying investments, this resolution signifies a commitment to securing a fulfilling retirement.
Remember, you are never too young, or too old, to begin planning for retirement.
4. Invest for the Future
Investing in the new year offers the opportunity for potential growth and wealth creation beyond traditional savings, helping to combat the eroding effects of inflation and potentially yielding higher returns over time.
It involves taking steps to make your money work harder for you, whether it be through stocks, bonds, real estate, alternative asset classes, or other avenues. This resolution involves learning about investment options, assessing your risk tolerance, and creating a diversified portfolio that aligns with your goals.
With this resolution, you’re laying the groundwork for potential wealth accumulation, financial security, and the realization of future aspirations.
Related: The Power of Investing Young
As the year unfolds, embracing these resolutions sets the stage for greater stability, freedom and prosperity. Whatever you resolve to do in 2024, may your year be a chapter brimming with health, wealth and abundance.
Our team of financial advisors are always here to help. If you’re in need of personalized guidance tailored to you – whether it be navigating complex investment strategies or retirement planning – Bautis Financial’s proactive approach to financial planning will provide you peace of mind for the financial decisions in the year ahead.
You’re welcome to schedule a complimentary consultation using the link below. Here’s how our process works.