As the year winds down, many of us reflect on our finances and look ahead to what we can accomplish in the coming months. Financial resolutions are powerful tools that can help you take control of your money, increase your savings, and set clear goals to achieve the lifestyle you want. Starting your planning early can help you enter 2024 feeling prepared and motivated to make your financial dreams a reality. Here’s how to start planning now for a financially successful new year.

Why Financial Resolutions Matter

Financial resolutions can be transformative, especially when they're clear and actionable. Having solid financial goals helps you avoid spending traps, focus on saving, and plan for major milestones like buying a home, investing in your future, or clearing debts. They also bring peace of mind, which in today’s uncertain economic landscape, is invaluable.

But where do you start? Let’s break down some practical steps to set up financial resolutions you can stick with in 2024.

1. Assess Your Current Financial Situation

Before you decide where you’re going, you need to know where you are. Start by listing all your sources of income, monthly expenses, debts, and assets. Take a close look at your spending habits over the past year, as this will help you see where your money is going and reveal any patterns. By identifying areas where you might be overspending, you can adjust your budget to better align with your future goals.

Action Step:

Create a simple spreadsheet or use budgeting apps to visualize your finances. Seeing your finances laid out in one place is often eye-opening and can help you spot areas to improve.

2. Set Clear, Achievable Goals

It’s essential to be specific when setting financial goals. Instead of vaguely stating, “I want to save more,” set a target, such as “I want to save $5,000 for an emergency fund.” You can break it down further by setting monthly or weekly saving targets, which makes it easier to track and meet your goals.

Some common financial goals for 2024 might include:

• Building an emergency fund
• Saving for a down payment on a home
• Paying off high-interest debt
• Starting or increasing contributions to an investment account

Action Step:

Write down three to five financial goals and specify an amount, timeline, and steps for each one.

3. Create (or Update) Your Budget

A budget is the backbone of any financial plan. By creating or updating your budget, you ensure your income aligns with your spending habits. Break down your budget into essential expenses (like rent, utilities, groceries), discretionary spending (like entertainment and dining out), and savings goals.

If you’ve never budgeted before, consider using the 50/30/20 rule: allocate 50% of your income to needs, 30% to wants, and 20% to savings and debt repayment. Adjust these percentages to suit your personal circumstances.

Action Step:

Use budgeting tools or a simple spreadsheet to organize your expenses and set limits for each category. Track your spending weekly to stay on course.

4. Evaluate Your Debts and Create a Repayment Plan

Debt can be a significant hurdle in achieving financial stability, but with a clear repayment strategy, you can make substantial progress. Start by listing all outstanding debts, including interest rates, minimum monthly payments, and balances. This will allow you to prioritize repayment strategies, whether it’s the avalanche (paying off high-interest debt first) or snowball (paying off the smallest debt first) approach.

Action Step:

Choose a debt repayment method that works for you and adjust your budget to include extra payments toward your priority debts.

5. Build an Emergency Fund

An emergency fund is a safety net that can keep you financially secure in times of unexpected hardship, like job loss or medical emergencies. If you don’t already have one, prioritize building an emergency fund in 2024. Ideally, aim for three to six months' worth of essential expenses.

Action Step:

Decide on a monthly amount to set aside specifically for your emergency fund. Automating this amount through direct deposits into a separate savings account can make saving feel effortless.

6. Plan for Retirement Early

Regardless of your age, planning for retirement is crucial. Start by reviewing your retirement accounts, such as superannuation or pension contributions, and see if you’re on track to reach your retirement goals. Consider increasing your contributions if your budget allows, as even small increases now can lead to substantial growth over time.

Action Step:

Use retirement calculators to check if your savings will meet your retirement goals. If you’re unsure about retirement planning, speaking with a financial advisor can be very beneficial.

7. Consider Your Investment Options

If you have disposable income, investing it wisely can help grow your wealth. Look at options like stocks, mutual funds, or even real estate, depending on your risk tolerance and financial goals. Diversifying your investments can protect you from market fluctuations and allow your money to work for you in multiple ways.

Action Step:

Identify your risk tolerance and investment goals, and start with an investment vehicle that aligns with your timeline and comfort level.

8. Automate Your Finances for Better Management

Automating your financial plan makes it easier to stick to your resolutions. Set up automatic transfers to savings accounts, bill payments, and even investment contributions. This can help you avoid late fees, penalties, and the temptation to overspend.

Action Step:

Set up automatic transfers with your bank to ensure your goals are consistently being met without needing frequent manual input.

If 2024 is the year you’re ready to take charge of your financial future, Wealthy You is here to help. Our financial experts can guide you in creating a custom plan that meets your unique needs, from budgeting assistance to investment advice and beyond. Contact us today for a free consultation and let’s make 2024 your most financially successful year yet!

---

FAQs

How can I stick to my financial resolutions throughout the year?
Break down your goals into manageable monthly or weekly targets. Regularly reviewing your budget and making adjustments as needed will help you stay on track. Automated savings and investments also make it easier to stick with your plan.

What should I prioritize if I have limited funds?
Prioritize building an emergency fund and paying off high-interest debt first. These two steps will create a strong foundation for financial growth and reduce financial stress.

How much should I aim to save each month?
The amount varies based on your financial goals, but a general guideline is to save at least 20% of your income. Start with what you can comfortably afford and gradually increase the amount over time.

Is it worth consulting a financial advisor for my 2024 financial goals?
Yes, if you’re looking to make substantial financial changes or investments, a financial advisor can provide guidance and help tailor a plan specific to your needs and goals.

 

If you have any questions or need further assistance, please contact us.

info@wealthyyou.com.au

☎️ (02) 7900 3288