Financial Resolutions for 2024: Building Wealth and Security
The beginning of a new year is an opportune time to set clear financial resolutions that can significantly improve overall financial health. According to a recent survey, almost half of Americans plan to make finance-related New Year’s resolutions in 2024, representing a substantial 36% increase from the previous year. This surge indicates a growing awareness of the importance of financial planning and management. However, it’s essential to note that 40% of those surveyed believe that sticking to financial resolutions will be harder in 2024 than in 2023. This highlights the need for actionable strategies and commitment to achieve these resolutions.
One crucial aspect of improving financial health is the utilization of employer-offered financial wellness benefits. Employers often offer programs to address broader financial wellness needs, such as student loan management, wellness benefits stipends, and access to financial advisors. Mindy Yu, Director of Investing at Betterment at Work, emphasizes that one of the biggest untapped areas to build wealth easily is through employer’s benefits packages. By taking advantage of these benefits, individuals can build wealth and ease financial anxiety. This underscores the importance of leveraging the resources provided by employers to secure financial well-being.
Regularly checking credit reports is another vital practice to maintain good credit health and spot potential fraud. Margaret Poe, Head of Consumer Credit Education at TransUnion, advises individuals to consistently check their credit reports, emphasizing that “just like you may regularly review your budget, make it a point to consistently check your credit report.” By monitoring credit reports, individuals can identify and address any discrepancies or unauthorized activities, safeguarding their financial well-being. Websites like annualcreditreport.com offer free access to credit reports, enabling individuals to stay informed about their credit status.
Furthermore, reviewing and eliminating unnecessary recurring subscription fees can significantly impact financial well-being. Jeff Miller, US Vice President at Nudge Global, highlights the prevalence of subscription fees, emphasizing that “everything is a subscription, and these fees add up!” It’s crucial to conduct an audit of subscription fees to identify and eliminate unnecessary expenses, thereby saving money and optimizing financial resources. By reassessing and streamlining subscription expenses, individuals can allocate these funds towards savings or investment, contributing to long-term financial stability.
Switching from using a debit card to a cash back credit card for most purchases can also contribute to building wealth. Phil Dengler, Co-Founder of The Vacationer, advocates for credit cards, stating that “credit cards are superior to debit cards in every way, but only for those responsible enough to pay their statement balance in full every month.” By utilizing cash back credit cards, individuals can earn rewards on their purchases, effectively earning money on their spending. This strategy aligns with the goal of optimizing financial resources and maximizing benefits from everyday transactions.
In addition to these resolutions, individuals should consider refinancing or consolidating high-interest variable debts to alleviate indebtedness. Alia Dudum, a Money Expert at LendingClub, recommends considering options to refinance high-interest debts, emphasizing that “to get off the hamster wheel of debt in 2024, consider refinancing or consolidating high-interest variable debts from credit cards into a personal loan.” By exploring these financial strategies, individuals can reduce interest payments and streamline their debt repayment, ultimately achieving greater financial stability.
Planning for Financial Security and Growth
As individuals embark on their financial journey in the new year, it’s crucial to reassess insurance coverage to ensure adequate protection. Bryan Davis, EVP, Head of VIU by HUB, emphasizes the importance of reassessing insurance policies, highlighting that “with nearly 22% of homes underinsured, the new year is the perfect time to reassess your insurance policies.” Adequate insurance coverage provides a safety net against unforeseen events, safeguarding individuals and their assets from potential financial setbacks.
Furthermore, increasing retirement savings contributions with specific, detailed plans is essential for long-term financial security. Kelly LaVigne, VP of Consumer Insights at Allianz Life Insurance Company of North America, encourages individuals to maximize their 401(k) contributions to gain the full match from their employer. This proactive approach ensures that individuals capitalize on employer-matched contributions, effectively boosting their retirement savings. By setting specific and detailed plans for retirement savings, individuals can work towards achieving their long-term financial goals and securing a comfortable retirement.
Another critical aspect of financial planning is the establishment of emergency funds to mitigate financial uncertainties. Andrew Housser, Co-Founder and Co-CEO of Achieve, stresses the importance of maintaining an emergency fund, stating that “it’s a step beyond living within your means, as it provides a cushion for unexpected expenses, for saving toward your goals and for less stress.” Building a permanent rainy-day fund and maintaining an emergency fund equivalent to 3-6 months’ worth of expenses can provide financial resilience and peace of mind, shielding individuals from unexpected financial challenges.
Moreover, reviewing financial plans regularly with a partner is essential to align with life changes and priorities. Open communication and collaboration in financial decision-making can strengthen relationships and bolster financial well-being. Michael Hershfield, CEO & Founder of Accrue Saving, emphasizes that “being open and transparent about your finances can benefit both your relationship and financial well-being.” By regularly discussing financial plans and goals with a partner, individuals can ensure that their financial strategies align with shared objectives, fostering financial harmony and unity.
Strategic Financial Management and Decision-Making
Taking control of interest rates by exploring options to lower them is a proactive step towards financial optimization. Matt Schulz, Chief Credit Analyst at LendingTree, encourages individuals to explore opportunities to lower interest rates, highlighting that “it’s absolutely worth making the call.” By negotiating lower interest rates on loans or credit cards, individuals can reduce interest expenses, freeing up resources for savings or investment. This proactive approach empowers individuals to take charge of their financial obligations, contributing to long-term financial stability.
Additionally, seeking advice from financial experts is instrumental in establishing a solid financial plan for the future. Financial advisors can provide personalized guidance and strategies tailored to individual financial goals and circumstances. Stephanie Hughes, CEO of Wiss Private Client Advisors, emphasizes the value of early saving and investing for retirement, stating that “retirement can be the largest expense you have ever had to save for.” By leveraging the expertise of financial professionals, individuals can gain valuable insights and recommendations to optimize their financial plans and navigate complex financial landscapes effectively.
In conclusion, setting clear financial resolutions for the new year is paramount to improving overall financial health and building wealth. By leveraging employer-offered financial wellness benefits, monitoring credit reports, and strategically managing expenses, individuals can proactively enhance their financial well-being. Through prudent financial decision-making, proactive planning, and seeking expert advice, individuals can pave the way for long-term financial security and growth.
The information provided is for general informational purposes only. No investment advice is given.