What Are Financial Priorities for 2024
As we enter 2024, it’s the perfect time to reassess your financial situation and set clear priorities for the year ahead. With economic uncertainty looming and the threat of a potential recession, having a firm handle on your finances is more crucial than ever. While general tips like “save more” or “get out of debt” are helpful, achieving meaningful financial progress requires a tailored, strategic approach customized to your specific circumstances and goals.
Too often, people set lofty New Year’s resolutions without the concrete planning and direction to follow through. This year, ditch the ambiguous resolutions in favor of a thorough financial self-assessment and establish clearly defined, actionable priorities. To ensure that your financial priorities align with your estate planning goals, consider consulting with our team of estate planning lawyers. They can provide personalized guidance and help you create a comprehensive plan to protect your assets and provide for your loved ones in the future.
Here are the top financial priorities to focus on in the coming year for long-term financial health and peace of mind:
Conduct a Financial Audit & Set S.M.A.R.T. Goals
Before mapping out your 2024 financial priorities, you need a clear understanding of your current financial standing. Conduct a thorough financial audit by gathering all your latest income and debt statements. This audit will illuminate areas of financial strength and weakness. Where are you overspending? Where can you cut back? Are you adequately insured?
Once you have an honest picture of your money situation, determine where you want to realistically be: six months, one year, or three years down the road. Set clear financial goals using the S.M.A.R.T. criteria:
- Specific – Well-defined and unambiguous (e.g., “Save $10,000 for an emergency fund”)
- Measurable – Include precise metrics to track progress
- Achievable – Realistic based on your resources and efforts
- Relevant – Aligned with your life priorities and reasons “why”
- Time-bound – Established deadlines to work towards
Vague resolutions like “Save more money” are OK for starters, but you need specific, time-bound goals to manifest results. For example:
“To protect against job loss, I will automatically transfer $500 monthly to build a $10,000 emergency fund by December 31, 2024.”
With financial goals set using the S.M.A.R.T. framework, you can devise a detailed action plan to achieve them through conscious budgeting, earning more, and making smart money moves throughout the year. Review your goals regularly and adjust as needed.
Build an Emergency Fund
One of the wisest and most important uses of your savings should be building an emergency fund – a cash reserve specifically set aside for unexpected expenses or income losses. Without such a fund, an unplanned event like a job loss, major home or auto repair, or a large medical bill could quickly derail your finances and potentially send you into debt.
Your emergency fund should cover 3-6 months of essential living expenses. This includes rent/mortgage, utilities, food, transportation, insurance premiums, and minimum debt payments.
Once the goal is set, develop a plan to build the fund over time through systematic savings. Automate transfers from checking to savings with each paycheck. Even setting aside a small amount per week can allow you to accumulate significant savings over a year.
Pay Down High-Interest Debt Strategically
If you carry balances on credit cards, personal loans, or other high-interest debts, eliminating those should be a top financial priority this year. The interest rates on credit cards especially can be exorbitant – often 20% or higher. Keeping a $5,000 balance can cost over $1,000 annually in interest alone. Over time, compounding interest causes debt to snowball out of control.
Start by listing all your debts, including credit cards, auto, student, and personal loans. Calculate the total monthly payment amount and the total debt owed. This allows you to quantify how much of your income is drained by debt payments.
Next, prioritize which debts to attack first based on the interest rates. You can do this in one of two ways. The debt avalanche method prioritizes paying off the highest interest-rate debt first while making minimum payments on other debts. The debt snowball method focuses on paying off the smallest debt balance first, then rolling those payments to the next smallest debt.
Invest in Your Retirement
While more immediate financial priorities like emergency funds and debt repayment are important, don’t forget about your long-term retirement savings goals. The earlier you start saving and investing for retirement, the bigger the impact of compound growth over time.
If you have access to an employer-sponsored retirement plan like a 401(k), this should be one of the top vehicles to take advantage of, especially if your employer offers matching contributions. At a minimum, contribute enough to capture the full employer match – that’s free money you want to take advantage of.
In addition to increasing your retirement contribution rate, review your asset allocation across accounts annually. As you approach retirement age, you’ll likely want to adjust your risk profile to be more conservative. Working with a financial advisor can help ensure your investment strategy aligns with your retirement timeline and goals. As you plan for your future and accumulate assets, it’s crucial to consider estate planning as well. Consulting with an estate planning lawyer can help you develop a comprehensive plan to protect your assets and ensure your wishes are carried out effectively, providing peace of mind for you and your loved ones.
Prioritize Your Estate Planning
While often overlooked, having an up-to-date estate plan should be a major financial priority, especially if you have dependents or significant assets. An estate plan ensures your wishes are laid out regarding what happens to your money, property, and other assets after you pass away. It also appoints people you trust to handle your affairs if you become incapacitated.
At a minimum, you’ll want to create a will that specifies how your estate and possessions should be distributed upon your death. A will allows you to name guardians for minor children and choose executors to manage your estate. You can also use a will to specify how you’d like issues like taxes and debts handled.
If you already have an estate plan, review and update it annually as your situation changes due to factors like marriage, divorce, a new child, inheritance, or asset purchases/sales. Tax laws and estate planning regulations also shift over time.
Contact Our Nevada Estate Planning Attorneys
It’s never too late to thoughtfully prioritize your finances for the next 12 months and beyond. With strategic planning and discipline, 2024 can be the year you achieve monumental financial wins. If you need assistance handling your estate plan, call our Nevada estate planning attorneys today. You can reach us at 702-857-7879 or fill out our confidential contact form.
John Park is a highly experienced attorney in estate planning, probate, business law and guardianship to help people organize the elements of their lives through careful estate planning and asset protection measures.