Take time to create a financial checklist in 2024
It’s hard to believe that 2024 is just around the corner, but it will be here before you know it. After the holiday rush, the start of a new year is always a good time to review your finances. Here’s a six-step checklist you can use to help you get started.
Make Sure You’re on Track with Your Goals
Be sure to check whether you’re still moving toward your goals, such as saving for retirement. If anything has thrown you off course temporarily, be sure to contact your advisor for help.
If you’re still on track with your goals, chat with your advisor about any new goals you want to work toward. If you’re not contributing the maximum amount to your workplace retirement plan, for example, is 2024 the year you’ll be able to boost how much you sock away in a 401k?
Revisit Your Asset Allocation
How comfortable are you with the way your portfolio is invested in stocks, bonds and cash? We constantly monitor the investment environment and adjust our portfolio models to take advantage of opportunities and reduce risk. But it’s important for you to think about your tolerance for risk, whether it has changed, and if you’re comfortable with how your assets are invested. It’s a good time to check in with your financial advisor – particularly if you’re close to circling a retirement date on your calendar.
Update Your Estate and Insurance Plans
Most people set and forget their estate and insurance plans. So the start of a new year is a good time to review and consider:
Creating or updating your estate plan. If you don’t have an estate plan consisting of a will, power of attorney and healthcare proxy in place, make completing an estate plan a priority. An estate plan ensures that your assets are distributed according to your wishes.
Review and, if necessary, adjust your life insurance policies. Make sure there’s sufficient coverage for your family’s current financial needs. If your employer doesn’t offer an insurance policy, you may want to purchase your own. If you currently have life insurance, it’s crucial to access and optimize your coverage to safeguard your wealth, livelihood and loved ones effectively. If your net worth has grown or if there have been changes in your liabilities, January is a good time to make sure that your coverage provides comprehensive protection.
As always, contact your advisor with questions about how much life insurance coverage you may need.
Revisit Your Household Budget
Start the year by revisiting your household budget. Assess your average monthly income, as well as your fixed and variable expenses, and determine your financial priorities for 2024. This is a more important task than usual given the inflation we’ve seen over the past couple of years.
If you have trouble getting started, talk with your advisor for tips as well as a referral to one of the various online budgeting tools, including eMoney that’s available through the Elevage Partners Client Portal.
Check Your Emergency Fund
It’s recommended that you have an emergency fund with three to six months’ worth of living expenses in a safe, liquid account. If you don’t have a rainy day fund, consider setting aside money each pay period as part of your household budgeting process. If you do have an emergency fund, is the balance sufficient to tide you over in case of job loss or other unexpected event?
Tackle Your Debt
Even if you’re already good at managing debt, consider taking steps to help reduce and consolidate it. For example, if you’re expecting a raise or year-end bonus, consider applying the extra income to any balances with high interest rates.
Then think about consolidating any remaining debt, which may help you swap varying interest rates on multiple loans, credit lines or cards for a potentially lower rate on a single loan. Reducing the number of loans you carry can also help simplify your financial life and ease money stress. You may want to speak with your advisor about possible strategies.
The information contained herein represents the views of Elevage Partners at a specific point in time and is based on information believed to be reliable. No representation or warranty is made concerning the accuracy of any data compiled herein In addition, there can be no guarantee that any projection, forecast, or opinion in these materials will be realized. Any statement non-factual in nature constitutes only current opinion which is subject to change. These materials are provided for informational purposes only and do not constitute investment advice. Any reference to a security listed herein does not constitute a recommendation to buy, sell, or hold such security. Past performance is no guarantee of future results. The historical returns of any securities and/or sectors mentioned in this commentary are not necessarily indicative of their future performance.