4 Smart Moves for Your Money in 2024
2023 was a stressful year for our money. Inflation impacted essentials like groceries, gas and it also impacted interest rates so folks who have variable mortgages definitely felt this in their wallet.
2024 is here, please remember that every financial journey is unique, and understanding your own story is key to making positive changes in 2024. Let’s celebrate your achievements and use your experiences as building blocks for your financial future. Here are the 4 steps to get your money right in 2024.
1. Build you emergency fund
Experts recommend having 6-9 months’ worth of expenses saved up for emergencies – so that you can cover unforeseen events like car breakdowns, home repairs (i.e.: roof leak) or a job loss. An emergency fund, also known as a Rainy Day Fund can help you to pay your bills without having to rack up credit card debt.
How to start an emergency fund?
Start small, if you can start to save $40 a month in a separate account, preferably a high interest saving account since these accounts earn more interest than a regular account. Visit you bank and set up an automatic monthly transfer to make saving hassle-free. As your income grows, you can gradually increase your automatic contributions. Before you know it, you will have the funds waiting for you.
2. Build a spending plan that is aligned with your lifestyle
I’ve said this before, and a I’ll say it again: budgets don’t work. They are too restrictive, time consuming and doesn’t allow you the ability to see beyond your debts.
A spending plan, on the other hand can help you get a clear view on your money and allow you to allocate you funds so that you can pay all your essentials, get out of debt, track your savings, have money allocated for fun and help you to stop overspending. Get your hands on the Bacon & Heels Spending Plan HERE and kickstart your money plan!
3. Create a plan for paying off debt
While debt (or leverage as wealthy people call debt) can be a good tool for investments like a home or college/university, effective debt management is crucial for financial independence.
Creating a plan to pay off debt is a positive step toward financial well-being. Start by compiling a detailed list of all your debts, including credit cards and loans. Then choose between the two methods to pay off the debt – the Snowball method or the Avalanche method.
These are the two most popular debt repayment strategies; each offer distinct approaches to achieve financial freedom. The Snowball method prioritizes paying the smallest debts first. This method involves tackling debts in ascending order of balance, regardless of interest rates. This method creates sense of accomplishment and momentum as smaller debts are paid off, by providing a psychological boost that encourages people to stay committed to the debt repayment journey.
On the other hand, the Avalanche method focuses on prioritizing debts with the highest interest rates. This approach enables people to save money on interest in the long run. While the Avalanche method may not offer the immediate psychological rewards of the Snowball method, it is often more financially efficient, leading to a faster reduction in the total debt burden.
Ultimately, the choice between the Snowball and Avalanche methods depends on individual preferences and financial goals. If you are seeking a quick win, then you may find the Snowball method appealing; if you are prioritizing long-term cost savings opt for the Avalanche method to minimize overall interest expenses.
4. Find a financial planner
Take 15-20 minutes and look for a financial planner. Get recommendations from your bank, friends and family. When you meet with the potential financial planners, this is your opportunity to interview them. Yes, you will interview them and ask them about how they work, how they get paid, what services they provide, how they can help you reach your financial goals.
Take the time to meet with 2 to 3 financially planners to find the best fit. This way you can see if you have a connection.
Here are some tips when interviewing the financial planners.
1- Ask questions about how they like to work, their approach with customers, the number of times you should meet a year, etc.
2- Speak about your financial dreams and goals and ask them how they plan to help you to reach them.
3- Ask how they re compensated and if they are a fiduciary.
A financial planner can help you to navigate financial challenges, help you manage your money through life changes i.e.: getting married, death of a spouse, receiving an inheritance, birth of a child, etc. and have another person on your team who’s an expert in the financial field.
The bottom line
Taking control of your finances is a journey, not a destination. Embrace challenges, celebrate victories, and stay committed to your goals. Let’s make 2024 your year to make your money work for you and achieve the financial freedom you deserve!