We are already past the mid-point of the year, and whether you’re a financial whiz or just starting your journey towards financial wellness, the end of the year is the perfect time to review, adjust, and plan for the future.
If you’re ready to take your finances to the next level, read on.
4 Money Moves To Make Before 2024 Ends
Here are four key financial moves to consider before we say goodbye to 2024.
1. Maximize Retirement Contributions
Time is your greatest ally when it comes to retirement savings, and the end of the year is a prime opportunity to boost your nest egg.
- Review Contribution Limits: For 2024, individuals under 50 can contribute up to $22,500 to a 401(k) and $7,000 to an IRA. If you’re 50 or older, take advantage of catch-up contributions, allowing an extra $7,500 to your 401(k) and an additional $1,000 to your IRA.
- Adjust Withholdings: If you’re not maximizing your contributions, consider adjusting your withholdings to free up more cash flow for retirement savings.
- Explore Employer Match: Don’t leave free money on the table! Contribute enough to your 401(k) to receive your full employer match if offered.
Why This Matters: Compound interest is a powerful force. The earlier you contribute, the more time your money has to grow exponentially. Even small increases in contributions now can make a significant difference in your retirement lifestyle later.
2. Year-End Portfolio Check-Up
Just like a car needs regular maintenance, your investment portfolio needs a check-up to ensure it’s still aligned with your financial goals.
- Review Asset Allocation: Over time, your portfolio’s asset allocation (the mix of stocks, bonds, and other investments) can drift from your original plan. Rebalance by selling over-performing assets and buying under-performing ones to return to your desired risk level.
- Tax-Loss Harvesting: If you have investments that have lost value, consider selling them to offset capital gains you may have realized elsewhere. This strategy, known as tax-loss harvesting, can help reduce your tax burden.
- Consult a Financial Advisor: If you’re unsure about your investment strategy or need personalized advice, consider consulting a financial advisor. They can provide tailored recommendations based on your specific financial situation and goals.
Why This Matters: Regular portfolio maintenance helps manage risk, optimize returns, and keeps you on track to reach your long-term financial objectives.
3. Review and Update Your Budget
The end of the year is an ideal time to reflect on your spending habits and make adjustments for the coming year.
- Track Your Spending: Use budgeting apps, spreadsheets, or good old-fashioned pen and paper to track your income and expenses over the past few months. Identify areas where you can cut back and opportunities to save.
- Review Insurance Policies: Shop around for better rates on car, home, and health insurance. You might be surprised at the savings you can find.
- Set Financial Goals: Establish clear financial goals for the new year, whether it’s saving for a down payment, paying off debt, or building an emergency fund. Having specific goals will keep you motivated and focused.
Why This Matters: A well-planned budget empowers you to take control of your finances, reach your goals faster, and build a more secure financial future.
4. Boost Your Emergency Fund
Life is full of surprises, and not all of them are pleasant. An emergency fund acts as a financial safety net, providing peace of mind when unexpected expenses arise.
- Assess Your Needs: Aim to have 3-6 months’ worth of living expenses saved in an easily accessible account.
- Automate Savings: Set up automatic transfers from your checking account to your emergency fund each month.
- Replenish After Use: If you need to dip into your emergency fund, make a plan to replenish it as soon as possible.
Why This Matters: Having a robust emergency fund can prevent you from going into debt due to unforeseen circumstances like job loss, medical bills, or car repairs.
The Bottom Line
Taking these four financial steps before the year ends can set you up for a more prosperous and financially secure 2025. Remember, small changes can make a big difference over time.
