As we approach the dawn of a new year, it's the perfect time to reflect on our financial journey and set meaningful goals that will pave the way for a more secure and prosperous 2024. When considering resolutions for the new year, here are some impactful financial goals to consider:
1. Build (or Rebuild) Liquidity: Some use the terminology “Emergency Fund”, but building liquidity could also be used for upcoming opportunities. After significant rallies in asset prices heading into the end of the year, it makes sense to consider a rebalance that can take profits and allocate them from long-term allocations toward potential cash needs in the coming year or liquidity towards potential investment opportunities.
2. Increase Retirement Contributions: Evaluate your retirement savings and determine if you can increase your contributions. In 2024, both regular IRAs and 401k contribution limits will increase by $500 per person. Take advantage of employer-sponsored retirement plans or individual retirement accounts (IRAs) to build a robust nest egg for your future. The power of compounding works best when you start early.
3. Review and Update Insurance Policies: Carefully review your health insurance, life insurance, and property insurance policies and update as needed. Asking yourself a few quick questions can be helpful in the review process:
What are the coverage limits and are they sufficient for your current needs and lifestyle? What are the exclusions listed in your policy and do they align with your understanding and expectations? What specific events or items does the policy cover and have there been updates to the inclusions since your last review? Have there been any changes in the premium amounts? When do your policies expire or renew?
Regularly reviewing and updating your policies can help to ensure adequate coverage and avoid any gaps in protection.
4. Meaningful Conversations: Often the most important financial steps are relational. It is important to work with your spouse on budget, goals for charitable giving, or even estate goals with your beneficiaries. Communicating and working with those close to your financial picture will not only enhance your financial journey but can also bring clarity and efficiency to common goals.
Financial success is a journey that requires thoughtful planning and consistent effort. By setting realistic and achievable financial goals, you're not just resolving to change your financial habits for the new year, but you are laying the foundation for a more secure and prosperous future. Remember, small steps today can lead to a significant financial impact tomorrow. Cheers to developing healthy financial habits so you are free to focus on what matters most!
*The foregoing content reflects the opinions of Van Hulzen Asset Management DBA "Van Hulzen Financial Advisors" and is subject to change at any time without notice. Content provided herein is for informational purposes only and should not be used or construed as investment advice or a recommendation regarding the purchase or sale of any security. There is no guarantee that the statements, opinions or forecasts provided herein will prove to be correct. Past performance may not be indicative of future results. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses which would reduce returns. Securities investing involves risk, including the potential for loss of principal. There is no assurance that any investment plan or strategy will be successful.