Priya PatelTLDR:
According to Fidelity Investment’s New Year’s Financial Resolution study for 2024, the top resolutions are saving more (41 percent), paying down debt (38%), and spending less (30%). The author advises tracking spending, replenishing savings, reducing high-interest debt, contributing to retirement accounts, and returning to the basics of investing as key financial resolutions for 2024.
Track Spending
Knowing how much money is coming in and going out allows individuals to create an actionable plan. Users can turn to technology, such as their bank’s app or budgeting tools like PocketGuard, Goodbudget, and YNAB to track expenses.
Replenish Savings
If individuals have spent too much or gone on splurges, they should replenish or fund an emergency reserve that can cover 6-12 months of living expenses. High-yield savings accounts and certificates of deposit are still offering about 5% interest rates, making saving easier.
Reduce High-Interest Debt
After building an emergency reserve, individuals should redirect automatic payments to accelerate debt pay-down. Starting with the highest interest debt first and gradually working down, this strategy helps reduce the cost of servicing debt.
Contribute to Retirement Accounts
The IRS has increased the annual limit on contributions to work-based retirement plans, such as 401(k), 403(b), and 457 plans ($23,000 for those under 50 and $7,500 for those over 50). Individuals should contribute to their retirement accounts to the best of their ability.
Return to Investing Basics
After the market losses in 2022 and gains in 2023, individuals should avoid trying to time the market and focus on diversifying their investments across different asset classes. It is recommended to determine financial goals and create a plan that aligns with desired allocations.
Jill Schlesinger, a CBS News business analyst, suggests these financial resolutions to help individuals improve their financial well-being in 2024.
