While losing weight or learning a new language can be a good New Year’s resolution, the beginning of the year can also be a good time to get your finances in order.
Your financial goals will likely change based on age, but there are still tried-and-true goals that people of any age should strive for. If you or your kids are starting their career think about those first steps.
“Before you do any kind of retirement savings, tackle that debt first,” said Candace Lee, client adviser and vice president at Glassman Wealth Services.
Credit card debt alone surged to nearly a trillion dollars in late 2023.
“We’re looking at sometimes north of 20-25% interest for having that debt,” she said. “Whatever kind of helps you get the ball rolling to, to pay down that type of debt aggressively. I think that almost comes before saving.”
Another goal to consider is saving cash in an emergency fund. Lee said you want at least three to six months of household expenses in a high-yield savings account.
“Do you have enough if something were to happen?”
From there, financial goals should change based on age, point-of-career and other goals for 2024.
For younger savers, Lee suggests exploring workplace benefits to take full advantage.
“There’s disability insurance, …there’s obviously the 401(k) and 403(b),” she said.
And while paychecks may be smaller for younger earners, any amount that can be contributed to retirement accounts — such as traditional or Roth IRAs — can have a big impact.
“Even if it’s not a lot to begin with, just a little bit of time makes a huge difference,” Lee said.
If you are on the other side of the spectrum and approaching retirement, different goals should be in mind.
Lee said if retirement is in you near future, completing a financial analysis should be a top priority during 2024.
“What assets do you have now? How much are you saving right now? What are some of the goals in retirement that you have?” she said. “Because the last thing that you want is to approach retirement … feel like you should be working or feeling like you have to keep working only because you weren’t necessarily prepared for retirement.”
Fiscal discipline, saving and retirement planning is an important goal to have, but Lee said another goal should be learning to spend your money wisely. She suggest spending it on the most precious commodity, time.
“Not being afraid to spend money to free up your time is so important just because we can’t get time back,” she said. “It might be hiring a cleaning person to come into the house once a week so you can spend more time doing things that you love.”
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