The holiday season is ramping up, but there’s no time to dawdle with your 2024 financial New Year’s resolutions. Even if you aren’t making an end-of-year vow to clean up your act, you should make some money moves right now to ensure a financially fruitful 2024 — and about half the country has already gotten started.
A new GOBankingRates survey of more than 1,000 adults found that 49% of people have already begun taking action to position themselves for success starting Jan. 1. Gen Zers in particular are eager to get a jump on their finances in 2024. More than 61% of the youngest adults ages 18-24 have already started planning and preparing. Comparatively, just 54% of 25-to-34-year-olds can say the same, and only 53% of 35-to-44-year-olds.
Younger Gen Xers aged 45-54 are most likely to procrastinate — only 42% have begun laying the groundwork for next year. Older Gen Xers and boomers aren’t too far ahead, with 55-to-64-year-olds and the 65-and-up crowd both mired in the mid-40s. If you’re among the 51% overall watching the clock run out on the year without acting, here’s what you need to do no matter your age — and what you stand to lose if you don’t.
Update Your Budget — You’ve Been Spending According to a Budget, Right?
The first step for just about everyone is to revisit and revise your household budget. If you don’t have one, it’s hard to imagine anything else could take priority over the tool that will have the biggest say in whether 2024 brings financial freedom, or if you spend another year broke, stressed and hiding from your bills.
“My advice for preparing for a financially healthy 2024 is to focus on comprehensive budget management and forward-looking financial strategies,” said attorney and personal finance expert Loretta Kilday, Esq., of Debt Consolidation Care. “First and foremost, establishing a zero-based budget is crucial. This method ensures every dollar is assigned a specific role, helping to curb unnecessary spending.”
Resist the Urge of the Holiday Splurge
Setting yourself up for a prosperous 2024 is partly about what you do, but also what you don’t do. Even the most disciplined spenders loosen the reins during the holiday shopping season, but with the new year on the horizon, now is the time to stay focused and count every dollar.
“Think before spending,” said consumer finance and debt expert Andrew Housser, co-CEO and co-founder of the debt-management site Achieve. “Most people want a holiday that is spent with family and friends, is relaxing, and, for many, has an important spiritual element. None of those things requires spending to the point of going into debt.”
Get Reacquainted With Your Credit Report
Enter 2024 knowing what lenders, employers and landlords see when they look at your financial profile.
“Check your credit reports if you’ve not done so within the past year,” said Housser. “Through December, you can obtain reports once a week at no charge from each of the major credit agencies — Experian, TransUnion and Equifax. Visit AnnualCreditReport.com and check your reports carefully. If there are any inaccuracies, correct them by following the directions on each agency’s website.”
Review Your Insurance Coverage
Most people don’t think about their insurance coverage until they need it. Premiums are a recurring expense that are usually on autopay and easy to forget — but you could be missing out on significant monthly savings by keeping it on the back burner.
“This is a good time of year to make sure you are getting the best auto and homeowner’s or renter’s coverage and rates,” said Housser. “Go online to compare quotes and evaluate any life insurance, as well.”
Convert Credit Card Debt to Something Less Toxic
Revolving debt was always among the most toxic, but today’s hideous APRs make it all the more important to go into 2024 with a clean slate.
“With interest rates currently over 20% for most credit cards, we encourage our clients to find ways to reduce any debt and its growing interest,” said Natalia Brown, chief compliance officer for National Debt Relief. “This can be as simple as creating a plan to track expenses and bills while also negotiating with credit card companies when possible.”
It can be that simple in the long term, but if you hold significant debt, eliminating it in a month is an unrealistic goal. However, converting it to a more manageable form of debt by year’s end might not be.
“Some of our clients have been able to transfer their credit card balances over to a new card with 0% interest rate for up to 18 months, which can really make a difference,” said Brown.
Balance transfers are an excellent way to buy time — but they’re not the only option.
“Look into a personal loan to consolidate and eliminate the debt, credit counseling to obtain a slight decrease in the interest rate, or a debt resolution settlement, the latter of which if you’ve gone through a serious financial hardship and are having a hard time with even minimum payments,” said Housser.
Take Steps To Lower Your Tax Bill and Boost Your Refund
The end of Daylight Savings Time signals the final few weeks of the tax season — and when this one ends, the next one begins.
“From a planning perspective, year-end is a great time to review taxes and try to limit the amount you owe,” said Eric Blattner, CFA, CFP, enrolled agent, certified investment management analyst, wealth advisor and partner at Divvi Wealth Management. “Consider Roth conversions, especially if you think the odds of landing in a higher tax bracket in the future are good. Your tax liability will increase this year, but it could mean big tax savings down the line. Tax loss selling, where you realize losses to offset current or future capital gains, can make sense for investments held in taxable accounts. Don’t forget to review bond holdings, too. An ETF tracking an aggregate bond index, for example, is still down 20% from its 2020 highs and is off 5% year-to-date. Finally, remember to take those required distributions from qualified accounts like IRAs. The penalty for failing to do so was reduced in the SECURE Act 2.0, but it still could be as much as 25% of the distribution amount.”
The moves Blattner suggests are fairly sophisticated, which is another reason to get started now. It’s the slow off-season for tax professionals, who currently have wide open schedules and the potential for lower rates than you’ll find when they get busy as the procrastinators flood their offices in the first months of the new year.
