Revamp your finances: Smart financial new year's resolutions for 2024

Many Americans set goals for the new year that involve getting in better shape or cutting out bad habits, but one expert says to be sure not to ignore your financial health when planning your self-improvement. 

David Ragland, CEO of IRC Wealth and a certified financial planner, provided FOX Business with a list of financial New Year’s resolutions to help keep you on track for 2024.

1. Budget
2. Update your personal balance sheet
3. Tackle debt
4. Boost retirement contributions
5. Savings
6. Review investments
7. Seeking professional advice

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1. Budget

Ragland recommends reviewing or setting up a monthly spending budget as part of planning for 2024. He suggests reviewing where your money is going, using a three-month average to smooth out the peaks and valleys, and seeking ways to get more bang for every buck.

Analyzing income streams, expenses and discretionary spending helps in understanding where money flows and enables informed decisions. Consider leveraging budgeting apps or spreadsheets for better organization and tracking.

2. Update your personal balance sheet

Updating your personal balance sheet in 2024 empowers you with a clear understanding of your financial position. It serves as a road map, guiding financial decisions and fostering stability, security and growth in your finances.

According to Ragland, January is an excellent time of year for folks to account for where they stand financially.

“Spend time writing down your assets and debts so that you can see the progress you made in 2022, and to help you set goals for 2024,” he suggests.

3. Tackle debt

For anyone ending the year with credit card debt, Ragland recommends making a list of the amount owed and the interest rate on each card. Launch a plan to pay them off, focusing on the card with the highest interest rate first while making the minimum payments on other cards.

The financial adviser also suggests calling card companies and asking for a rate reduction on cards with high interest rates. If a company declines the rate reduction request, consider a balance transfer to a lower rate card. 

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Those with a mortgage might want to make a plan to pay it off faster. Ragland suggests making bi-monthly payments to speed up the pay-down. Or, you could gradually add a little extra to each payment, starting with $50 to $100 per month and then increasing that by adding a few dollars each month to the extra payment amount.

Whether it is student loans, credit card debt or mortgages, devising a strategy to pay off high-interest debts can alleviate financial stress and free up resources for other goals.

4. Boost retirement contributions

The IRS has increased the amount individuals can contribute to their 401(k) plans in 2024 to $23,000, up from $22,500 for 2023. These increases apply to 403(b) and 456 plans, too.

Individual Retirement Arrangements, or IRA, limits will be higher as well, at $7,000 for those under age 50 and $8,000 for those aged 50 years of age or older.

Aim to max those out, if possible, to take advantage of the tax savings of these long-term investment plans. Did you receive a raise in the fourth quarter of 2023 or expect one in the near future? If so, consider using the increase in pay to get you closer to your retirement savings goals.

Be sure to review your employer’s 401(k) match and try to contribute at least as much to the plan to reach that threshold.

Ragland also suggests automating your savings. 

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5. Savings

Building or reinforcing an emergency fund remains a critical financial goal. 

Setting aside three to six months’ worth of living expenses in a separate account safeguards against unforeseen circumstances, providing a safety net during challenging times.

“Smaller, more consistent saving amounts into retirement and after-tax investment accounts lead to big gains in the future,” Ragland says.

6. Review investments

Take the time to analyze your investment portfolio and consider rebalancing it if you are “overweight” in some sectors. If you have an adviser, Ragland says, set up a meeting to review your progress and any changes that may be appropriate in the new year.

7. Seeking professional advice

Consulting financial advisors or planners for guidance, especially when considering complex financial decisions or long-term investments, can offer valuable insights and strategies tailored to individual circumstances.

Setting financial goals for 2024 requires a holistic approach, encompassing budgeting, debt management, savings, investments, career growth, estate planning and adopting sustainable financial habits. 

By outlining specific, measurable, achievable, relevant, and time-bound (SMART) goals, individuals can navigate 2024 with purpose and work towards a stronger financial future.