New Year, New Budget: 5 Steps to Financial Success in 2024
Ready to level up your finances in 2024? Learn how to track income, pay down debt, invest smart, and manage your wealth – tips for financial success in the new year!
Track Your Income, Expenses, and Debt
First, sit down and get as detailed as you can on your income sources, your expenses and your debt.
How do you earn income?
If you earn it from one source, is there effectively a ceiling on it?
Is there real potential for your income to rise in the next few years?
Are there additional income sources you could explore?
Next, review your core living expenses, the ones you can’t avoid (such as a mortgage payment, car payment, etc.). Also think about the ones you have more control over (gym membership, travel budget, etc.). Can expenses in either bucket be reduced? Investing aside, you position yourself to gain ground financially when income rises, debt diminishes and expenses stay (relatively) the same.
Master the Debt Game: Pay Smart or Pay Fast?
Most people will carry some level of debt throughout their lives because building wealth often requires the use of debt. This is commonly seen with debt like mortgages and student loans. There is a balance to strike between paying debt as scheduled and a more aggressive pay down plan. Coming up with the “right” answer is very personal, but often centers around the interest rate on the debt and the current market environment. Paying off debt, keeping balances low and restricting new debt all works toward improving your FICO score, another common financial goal that can open doors on path to financial success.
Invest for the Future: Why Now is the Perfect Time to Start
You can’t refrain from investing, even when it feels like the market is in a low point. In fact, that’s often the best time to increase your money in the market! You’re not going to retire on the relatively small elective deferrals from your paycheck; you’re going retire on the interest that those accumulated assets earn over time, plus the power of compounding. investing, this year and in years to come, has the potential to help you improve your financial success.
Manage Your Money, Don’t Let It Manage You
If you simply accumulate unmanaged assets, you have money just sitting there open to risk: inflation risk, market risk, even legal risks. Don’t forget taxes; while not technically a “risk”, they are a threat to your money. The greater your wealth, the more long-range potential you have to accomplish some profound things, provided your wealth is directed.
When to Call in the Pros: Seeking Expert Financial Guidance
If managing things on your own seems like a daunting task, seek out professional guidance for the wealth you are growing. A comprehensive investment plan with a risk management strategy unique to you and overseen by an expert will be something that pays dividends for years to come.