As the calendar turns over to a new year, it's an opportune time to reflect on our financial habits, set new goals, and take steps toward a healthier financial future. Whether you were on top of your year-end financial to-do list or you’re diving in for the first time, here are five steps to refresh your financial journey for 2024.
Review and Update Your Budget
It’s tough to plan if you don’t know where your money is currently going. A budget acts as your financial roadmap, guiding you toward your goals. Take a moment to review your spending habits from the past year. What trends do you see? Are there areas where you need to cut back or increase your spending, such as budgeting more for groceries and utilities? Be sure to also celebrate your financial wins, like the college nest egg you’ve established in a 529 account or your retirement savings.
Having a clearer picture of your financial landscape will enable you to update your budget for the upcoming year. If you’re not already using one, consider a budgeting app or tools to streamline the process and gain insights into your financial behaviors. Regularly revisiting and adjusting your budget ensures that it remains a dynamic tool that aligns with your evolving financial priorities.
Emergency Fund Checkup
Life is unpredictable, and having a robust emergency fund is crucial for weathering unforeseen challenges. Evaluate the status of your emergency fund and ensure it can cover three to six months' worth of living expenses. If your fund has been depleted, make replenishing it a priority. Consider automating contributions to your emergency fund each month to cultivate a consistent savings habit, as you may already be doing with saving for retirement.
Debt Management
High-interest debt can impede financial progress and strain your budget. Take stock of your outstanding debts, including credit cards, loans, and mortgages. A strategic approach to debt management involves setting realistic goals and milestones. Develop a debt repayment plan, prioritizing high-interest debts first. Consider debt consolidation or refinancing options to lower interest rates and make repayment more manageable. And be sure to celebrate small victories as you pay down debts, which can help you stay committed to your plan.
Review Your Investments
Reviewing your investment portfolio is essential for maintaining a healthy financial strategy. Your financial advisor can help you assess the performance of your investments and ensure your portfolio aligns with your financial goals and risk tolerance. Consider diversification to spread risk and explore new investment opportunities. Keep in mind that investing is a long-term endeavor, and the right response to changing market conditions is often to remain committed to the goals and strategies that you and your advisor have set.
Financial Goal Setting
Setting clear financial goals is the cornerstone of a successful financial plan. Define both short-term and long-term objectives, making them specific, measurable, achievable, relevant, and time-bound (SMART). Whether it's saving for a home, funding your child's education, or building a retirement nest egg, having a roadmap increases your chances of success.
Develop a step-by-step plan to achieve your goals, breaking them down into manageable tasks. Regularly revisit and adjust your plan as circumstances change. Recognize the milestones you achieve along the way, and don't hesitate to talk to your financial advisor or seek other professional guidance to refine your strategy.
Bonus Tip: Conduct an Insurance Checkup
Protecting your financial well-being involves more than just budgeting and investing. Review your insurance coverage, including health, life, auto, and home insurance to ensure your coverage is adequate, especially if there have been significant life changes recently, such as marriage, the birth of a child, or a new home.
Whether 2023 was a financial high point for you or filled with unexpected challenges, the new year is a good time to fine tune—or maybe more seriously overhaul—your plans. By starting with these five steps, you can be on your way to improved financial wellness and building a secure future. Remember, each small step you take today contributes to a brighter financial tomorrow.
The opinions and analyses expressed in this newsletter are based on Curi RMB Capital, LLC’s (“Curi RMB”) research and professional experience are expressed as of the date of our mailing of this newsletter. Certain information expressed represents an assessment at a specific point in time and is not intended to be a forecast or guarantee of future results, nor is it intended to speak to any future time periods. Curi RMB makes no warranty or representation, express or implied, nor does Curi RMB accept any liability, with respect to the information and data set forth herein, and Curi RMB specifically disclaims any duty to update any of the information and data contained in this newsletter. The information and data in this newsletter does not constitute legal, tax, accounting, investment or other professional advice. Returns are presented net of fees. An investment cannot be made directly in an index. The index data assumes reinvestment of all income and does not bear fees, taxes, or transaction costs. The investment strategy and types of securities held by the comparison index may be substantially different from the investment strategy and types of securities held by your account. RMB Asset Management is a division of Curi RMB Capital.
The content contained herein was generated by Curi RMB Capital with the assistance of an AI-based system to augment the effort.
Certified Financial Planner Board of Standards, Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™ and federally registered CFP (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.
