Financial Ins and Outs for 2024
At the start of each year, people are looking to lock-in their New Year’s resolutions to help improve various aspects of their lives, including health and wellness changes, career goals, and travel and leisure plans. An important but often left behind category of resolutions focuses on becoming more fiscally responsible.
We understand that changes to your financial situation are not always in your control and can be difficult to overcome, especially at the start of a new year. To help you take back control of your financial journey, we’ve created a list of financial practices to either embrace or leave behind this year with actionable steps you can take immediately to start seeing positive changes in your finances.
Here’s our list of financial ins and outs to become more fiscally responsible this year:
Creating a Realistic Budget
Making plans for your money is an essential step to a successful 2024. Creating a monthly spending plan allows you to decide where your money goes instead of wondering where it went. A popular budgeting guide is the 50/30/20 rule, which allocates 50% of your income to needs and expenses, 30% to wants, and 20% to savings. Once you have that guide, compare it to the current month’s spending and expenses. You can use our Monthly Budget Worksheet to help. Now, you’ll have a realistic look at how closely you’re following your desired budget to help decide what aspects of your finances need adjusting.
Making the Most of Your Savings
Allowing your savings to work smarter and not harder this year can help you earn more and stress less. Depending on your needs, moving your untouched funds from a regular savings account to a high-yield savings account or certificate is a great place to start. High-yield savings accounts offer the withdrawal and deposit conveniences of a savings account with a greater rate of return than a basic account. If you don’t need your funds to be easily accessible and can wait until maturity, a certificate is a wonderful option. Certificate terms can range from several months to several years and usually have fixed rates for consistent earnings.
Celebrating Little Victories (Responsibly)
Setting smaller goals for yourself can help keep you motivated and acknowledge the progress you’ve made so far. Celebrating these victories does not mean you have to “treat yourself” or spend anything at all. Your rewards could include engaging in self-care and relaxation, keeping a victory list to reflect on throughout the year, or even investing in yourself. There are thousands of free online classes, webinars, and talks that can reward you with knowledge on anything that piques your interest.
Continuous learning is one of our favorite “ins” of the New Year! Financial education continues to become more accessible through new digital resources and self-service tools. Our partners at Zogo even reward members for boosting their financial literacy and knowledge. Zogo app users earn points for completing bite-sized educational modules. These points can be exchanged for gift cards to popular retailers, which can help you save. Topics you can learn about include saving and budgeting, rent and mortgages, spending habits, and more!
Being Influenced into Overconsumption
Not only does overconsumption contribute to excess waste and clutter, but it’s also contributing to poor spending habits. In 2023, Americans spent $71 billion on impulse purchases influenced by their social media channels, with individuals on average spending up to $750 on these purchases. This year, start asking yourself, “Do I really want or need that, or am I being told I want or need it?” Easy steps to avoid unnecessary purchases include identifying emotional triggers, taking inventory of what you already have and own, and stepping back from a purchase to decide if a purchase is one you truly want to make.
Pushing Off Debt
It’s tempting to avoid things that feel uncomfortable or overwhelming. But to better your finances, it’s time to face your debt. There are two helpful strategies to feel more in control of your debt: the “avalanche” and “snowball” methods. The avalanche method focuses on paying less interest over time. To practice this method, you’ll pay extra money towards your debt with the highest interest rates and make minimum payments on your other debts. The snowball method focuses on eliminating how many total debts you have by paying off your smallest debts first and making minimum payments on your larger debts. Both options have their pros and cons, so choose the method that fits that works best for your current financial situation.
Being Unprepared for Life Events
Life is unpredictable… to an extent. An established emergency fund is the easiest way to anticipate something unexpected, like medical expenses, job loss, or home and car repairs. Create an emergency fund that is accessible and separate from your other accounts and leave those funds alone! For the life events you can anticipate like becoming a homeowner, getting married, or having kids, it’s time to educate yourself on how to be prepared. Our Learning Center offers educational resources for you to access whenever and wherever you are in your journey.
Your New Year’s ins and outs can vary greatly, even when it comes to your finances. It’s important to remember that when you create your own ins and outs list, you are intentional and realistic about the changes you want to see to help make a positive impact in your life.