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Financial Checklist to Start the Year Off Right

By Jane Young, CFP, EA

It is essential to begin the year by celebrating your 2023 accomplishments and taking a moment to appreciate all you have achieved. Start the new year from a place of abundance. Make a list of everything you are grateful for and express appreciation to those who have supported your success.

Start by reviewing your current situation. You need to have a starting point before you can plan for the future. Calculate your personal net worth by calculating the value of your assets less your debts. Estimate your projected income and expenses for the coming year.

Set some new goals for 2024. Think of goal setting as a personal strategic plan to provide you with a financial road map to guide you through the year. Create a spending and savings plan to support your goals.

Adjust your contributions to retirement plans and Health Savings accounts to maximize your 2024 contributions. The 2024 contribution limit for 401(k) and 403(b) plans is $23,000 plus a catch-up contribution of $7,500, if you are 50 or older. The 2024 limit on IRA contributions is $7,000 plus a catch-up contribution of $1,000, if you are 50 or older. The 2024 contribution limit on Heath Savings Accounts is $4,150 for individual plans and $8,300 for family plans. Those 50 or older can contribute an additional $1,000 as a catch-up contribution.

Replenish your emergency fund to cover at least four months of expenses. This may need to be higher if your income is unpredictable or you have rental property. If necessary, create a plan to pay down high interest debt.

Revisit your asset allocation to be sure it is still aligned with your financial situation and risk tolerance. Rebalance your portfolio to reflect your target asset allocation. When rebalancing your portfolio try to minimize tax consequences.

Review your insurance coverage to ensure you have adequate coverage and avoid paying for insurance that you no longer need. You may be paying a large premium on life insurance that is no longer needed or your assets may have grown to a level that additional liability coverage is needed. With the increase in home values over the last few years, you may need to increase the coverage on your homeowner’s insurance.

It is advisable to check your credit reports annually to be sure there has been no fraudulent activity.   Go to annualcreditreport.com to access your free credit reports.

Start utilizing technology to automate the payment of bills to ensure they are paid on time and avoid late charges.  Establish systematic monthly transactions to automatically contribute to savings and investment accounts.

Make an effort to enhance your investment knowledge in 2024. Take some time to read some articles and books and watch some webinars to improve your ability to manage your finances. Plan time in your schedule to work on your finances.