End of Year Financial Checkup

End of Year Financial Checkup

Review these 3 Financial Tips before December 31st .

The end of the year is a time when many of us reevaluate our life, habits, and goals and do a “reset” for the new year.  One area that often gets overlooked in the midst of planning is reviewing your financial habits and goals, so I’ve put together a short list of 3 areas to review before January.

  1. Review your budget
    • Are there any new expenses that you need to add or anything that can be taken out such as any unused subscriptions?
    • Identify what areas you could cut back or reallocate funds to align with your financial goals for the new year
    • If you don’t yet have a budget – here is a great article from Vida about a good place to start
    • Consider using a budgeting app to help you track your spending – here are a few good options of apps we would recommend.
  1. Beef up your emergency fund
    • A good rule of thumb is to have between 3-6 months’ worth of expenses set aside in a high-yield savings account. Here is a list of some of the current best HYSA’s as of December 2023.
    • Consider whether you should increase the target goal for your emergency fund. Factors to consider would include – job changes, a change in the number of dependents, or a change in the number of breadwinners.
    • If your emergency fund falls short of the target prioritize contributing consistently to ensure you have a safety net for unexpected expenses or job loss
  1. Review your investments –
  • Increase your retirement contributions– the new limits increased to $23k/year for elective deferral plans and $7k/year for Roth and Traditional IRAs. The catch-up contribution (available for anyone over age 50) remains the same at $7500 for elective deferral account and $1k/year for Traditional and Roth IRAs.
  • If you aren’t maxing out yet could you increase your current contributions 1% for this year? The consistent savings over decades of time will make a huge difference for your financial future.
  • Over the course of the year the market moves up and down and that can throw off your portfolio allocation and the end of the year is a great time to do a rebalance where you evaluate whether you need to make any changes to get your portfolio aligned with the target asset allocation. If you are unsure if your portfolio aligns with your risk tolerance, time horizon and goals, reach out to us at Mainstreet and we would be happy to help!

Here are a few other helpful resources to help you end 2023 well and get 2024 started on the right track:

Katherine Edwards
Katherine Edwards

Katherine is a Certified Financial Planner® and joined the Mainstreet team in 2022. She has a passion to help clients achieve financial peace of mind so they can not only achieve their goals but also enjoy life along the way. She has been in the industry since 2014 and received her CFP® designation through Kaplan’s program at Duke University in 2017. She enjoys helping clients create and implement a financial plan that is specific to their needs, values and goals. Katherine believes that having a comprehensive financial plan can change the trajectory of someone’s life and impact generations after them.

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