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12 Smart Moves for Your 2024 Financial Plan

December 20th, 2023 | 4 min. read

By Advance Capital Team

woman managing finances

Still feeling the pinch of rising costs? You’re not alone. The good news? Inflation’s finally cooling down from its 9% peak in June 2022, thanks to the Federal Reserve’s rate hikes. As of November, we’re down to a 3.1% inflation rate.

However, it could be a while before rates start to come down as well. This ongoing economic development means it’s a good time to plan your financial strategy for the new year. Think smart: consider stashing your unneeded cash in high-yield accounts and tackle that high-interest debt.

But what else can you do to boost your financial health in 2024? We’ve got you covered with 12 savvy financial moves that can set you up for a financially stronger new year.

1. Review your financial highs and lows in 2023

Before you make any 2024 financial resolutions, take an assessment of your 2023 finances. How did you do this year? What do you think you could do differently next year? Asking questions like these can help you review and adjust your budget for the new year.

Start by reviewing your past year’s bank and credit card statements to understand your spending habits and savings. Identify any unnecessary expenses, like unused gym memberships, and redirect these funds towards savings or investments.

For retirees, reevaluate your withdrawal rate. Did you withdraw too much, too little or just the right amount? Learn what a safe withdrawal rate is here.

This retrospection is key to recognizing past financial missteps and making more informed decisions for the upcoming year.

2. Tackle high-interest credit card debt

Eliminating any high-interest credit card debt is another smart financial move in 2024. While the Fed may lower rates in the coming year, don’t plan on them dropping back down to near zero. High rates can rapidly increase your debt, making it tougher to clear. By paying off this debt, you’ll have more funds for savings or investments.

3. Maximize returns on your idle cash

If you have funds in a regular savings account that you won’t need immediately, consider shifting them to higher-yielding options. With interest rates still elevated, vehicles like Certificates of Deposit (CDs), high-yield savings accounts or money market funds offer better growth potential.

These options are typically low-risk and can offer returns significantly higher than traditional savings accounts, sometimes up to 5.5% or more. If your current savings yield is below 1%, moving to a high-yield account is a savvy financial move for greater returns with minimal risk.

4. Reassess your insurance needs and shop around

Changes in life circumstances, like children moving out, can alter your insurance needs. Regularly reassessing your insurance needs ensures you’re not overpaying and are adequately protected. Compare rates across multiple carriers, potentially saving on premiums. For instance, consider if you need life insurance in retirement by reading this article.

Also, consider the impact of inflation on the value of your possessions. Ensure your policies adequately cover the true value of items like jewelry and collectibles, reflecting any increase in value.

5. Build or replenish your emergency fund

Aim to save three to six months’ worth of living expenses. This fund acts as a buffer against unexpected events like job loss, medical emergencies or other unforeseen expenses, preventing the need to rely on high-interest debt.

If you dipped into your emergency fund this year, prioritize refilling it. Keep these funds in easily accessible accounts like savings, checking, money market funds or CDs, ensuring you can quickly draw on them in a pinch. A solid emergency fund is a cornerstone of a secure financial plan.

6. Check your credit report and credit score

Regularly check your credit report and score to gauge your financial health. It also helps you detect errors and potential fraud or identity theft. You’re entitled to one free credit report every 12 months from each major bureau: Equifax, Experian and TransUnion. During the pandemic, these bureaus started offering weekly free reports, a benefit now made permanent. Access these at annualcreditreport.com.

7. Review your retirement account

While frequent checks can be stressful, an annual review of your retirement account(s) helps assess if you’re on track with your savings. If you’re falling short, consider upping your retirement contributions. The rule of thumb is to save 10-15% of your salary in plans like a 401(k).

For 2024, the contribution limit is $23,000, plus an additional $7,500 for those 50 and older. For IRAs, $7,000 for those under 50 years of age and $8,000 for those 50 or older. Remember, boosting your contributions, even slightly, can significantly impact your long-term financial health.

8. Make a difference with charitable donations

Enhance your financial and philanthropic impact with strategic charitable giving. Don’t wait until year-end. Integrate donations into your financial planning throughout the year. Cash donations offer a tax deduction of up to 60% of your adjusted gross income.

Alternatively, donating appreciated securities or property (like real estate or art) held for over a year allows you to deduct their fair market value and avoid capital gains tax. Ensure the charity is a registered 501(c)(3) and always obtain a receipt for donations over $250.

For IRA owners aged 70 ½ or older, consider a qualified charitable distribution. You can transfer up to $100,000 yearly directly from your IRA to a charity. This move can satisfy your required minimum distribution (RMD) and exclude the transfer from your income, thus avoiding taxes on what would be a taxable distribution. Remember, the key is a direct transfer to the charity.

9. Get a financial checkup from a financial adviser

Schedule a meeting with a financial adviser to review your financial plan and investment portfolio, especially if you haven't done so this year or during periods of market volatility. It’s crucial to check if you’re on track to meet your financial goals. Discuss whether you need to rebalance your portfolio or modify your investment strategy.

An adviser can also help you prepare for any upcoming events in 2024 that might impact your finances. This consultation is key to navigating short-term challenges and making timely adjustments for achieving your long-term objectives.

Schedule a free financial review with an Advance Capital Management adviser right now.

10. Look at your Social Security statement

A review of your Social Security statement periodically is a smart retirement planning move. Regularly checking your Social Security statement helps ensure your records are accurate and assists in planning for retirement or other life events. This statement provides detailed information about your earnings history, estimated benefits and potential disability, survivor or retirement benefits for you and your family. Sign up for an online account at www.ssa.gov/myaccount.

11. Set up or update your estate plan

If you’re uncertain about the distribution of your assets or decision-making in case of your incapacitation, it’s time to act. An estate plan outlines the beneficiaries of your assets and designates who manages your financial responsibilities after your death or if you become incapacitated. Essential components include a will, designated beneficiaries, a living trust, an advance healthcare directive, and a financial power of attorney.

Since estate laws vary by state, it’s vital to tailor your plan accordingly. Consulting a financial adviser is advisable to ensure your estate plan aligns with your financial assets and wishes.

12. Strengthen the security of your financial accounts

Using the same password for multiple accounts increases your vulnerability to cyber-attacks. A single data breach could compromise several of your accounts. Also, if you haven’t already, enable the additional authentication steps recommended by your bank for online access. Ensuring robust security measures are in place is essential to protect your finances from potential cyber threats. This proactive approach helps keep your accounts safe and your money secure.

Advance Capital Team

Advance Capital Management is a fee-only RIA serving clients across the country. The Advance Capital Team includes financial advisers, investment managers, client service professionals and more -- all dedicated to helping people pursue their financial goals.