As we usher in a new year, you’re likely thinking about your goals across all aspects of your life. After all, it’s the season when many people are making resolutions related to health, career goals, family, and more. It’s also the perfect time to set resolutions that prioritize your financial wellness – and your financial health certainly deserves attention and commitment. By making financial well-being a priority in 2024, you can work toward achieving your long-term financial dreams and securing a more stable future. Here’s how to get started:
Financial Wellness Step 1. Assess Your Financial Health
Begin by taking an honest look at your current financial situation. Examine your income, expenses, debts, and assets. Determine where your money is going and identify areas for improvement. This assessment can take a bit of time to complete, but it will serve as the foundation for your financial resolutions.
Get started by creating a detailed financial statement that provides a snapshot of your financial health. Include your income, expenses, savings, investments, and outstanding debts.
Financial Wellness Step 2. Set Clear Financial Goals
To achieve greater financial well-being, you need specific goals that align with your life’s aspirations. Whether it’s saving for a dream vacation, buying a home, or securing a comfortable retirement, your goals should be well-defined and realistic.
There is power in putting your goals on paper, so write down your financial goals for 2024. Include both short-term and long-term objectives. Make them specific, measurable, and time-bound to help yourself stay on track.
Financial Wellness Step 3. Create a Budget
A budget is your roadmap to financial success. It helps you manage your money effectively and stay on track with your financial goals. If you haven’t previously been intentional about allocating your income to various categories, including savings, expenses, and debt repayment, now is the time to embrace this critical process.
There is no one-size-fits-all budget, so design one that reflects your income and true spending habits. Track your expenses and adjust your budget as needed to maintain financial balance, and always be looking for areas to trim your spending in favor of achieving your goals.
Financial Wellness Step 4. Emergency Fund
Building an emergency fund is a crucial component of financial well-being. It provides a financial cushion to cover unexpected expenses like medical bills, car repairs, or job loss. Having three to six months’ worth of living expenses in your emergency fund is ideal, though you may want to increase the amount if your paychecks are variable or seasonal.
The idea of saving so much can be overwhelming but start small and do what you can in the beginning. Set up an automated savings plan to gradually build your emergency fund. Make consistent contributions to ensure you’re prepared for life’s unexpected curveballs – which we must all face once in a while.
Financial Wellness Step 5. Reduce High-Interest Debt
If you’re walking into the new year free from high-interest debt, congratulations! However, if you are facing something like credit card or personal loan balances, your debt can be a significant obstacle to your financial wellness. This year, focus on reducing and eliminating high-interest debts to free up more of your income for savings and investments.
If you’ve been feeling the strain of debt for a while, it might feel like you can never get out from under it. However, you can change your financial circumstances, so develop a strategy for paying down high-interest debts. Consider consolidating debts or transferring balances to lower-interest options.
Financial Wellness Step 6. Invest for the Future
Investing is a key element in growing your wealth over time. Consider your risk tolerance and investment horizon when selecting investment vehicles. Diversify your portfolio to manage risk effectively, and work with a financial advisor if you don’t feel confident about building your own strategic portfolio.
It’s smart to review your investment portfolio at least once a year and make adjustments as necessary to align with your financial goals. You can’t “set and forget” your investments if you want to experience continued growth over time.
Financial Wellness Step 7. Seek Professional Guidance
Working with a financial advisor can provide invaluable support on your journey to financial wellness. An advisor can help you create a customized financial plan, offer investment guidance, and provide insight into tax-efficient strategies. (Want to work with the Cash Financial team? Contact us today!)
If you don’t yet have a financial advisor, we recommend interviewing at least three to find a professional who both inspires your trust and offers the services you desire.
Financial Wellness Step 8. Regularly Review Your Progress
Consistent monitoring and adjustment are vital to achieving your financial resolutions. Regularly review your financial goals, budget, and investments to ensure you’re staying on track.
Some people have luck with setting aside time each month to assess their financial progress – a sort of “financial date night” either with your significant other or yourself and your favorite takeout! Use this time to assess and plan, but also to celebrate your achievements both large and small.
The Importance of Getting Intentional About Your Financial Well-Being
By making financial wellness a priority in 2024, you’re taking a proactive step toward securing your financial future. These resolutions can help you create a stronger financial foundation, reduce stress, and work toward your life’s aspirations in a more intentional and strategic manner. Remember that financial wellness is an ongoing journey, and with dedication and the right support, you can make it a reality.
If you’d like to enjoy a year of financial growth and prosperity in 2024, let’s talk! At Cash Financial, we take pride in helping our clients make wise financial decisions and take the mystery out of their financial futures. Contact us today to learn more!
