Jump-Start Your 2024 Plan
Key Takeaways
3 things to think about to jump start your financial planning for 2024
Assess your debt position, and come up with a strategy to pay them off.
What goals do you have and how do you intend to fund them?
Do you have a rainy-day fund? How much of a buffer will it provide you? Is it sufficient?
Some people may be comfortable making these considerations on their own, but having an advisor to help plan and navigate through financial life can be very helpful.
A goal without a plan is just a wish.
The new year is always a good time to reset, reflect on what happened over the past 12 months, and look ahead to fresh beginnings. With many of us setting new resolutions and targets, it is also a great time to take stock of your financial situation and make a plan to reach your goals.
Here are 3 things to think about, to help you jump-start your year-end planning before heading into 2024.
Are You Debt-Averse?
As humans, we all differ. Some of us do not mind holding onto loans or debt, whilst others shy away from it. Debt comes in many forms — mortgages, credit cards, and car loans to name a few. With interest rates at high levels, the interest you pay on your debt can add up quickly. For individuals who are concerned about the leverage they are exposed to, they can consider paying off their debt as soon as practicable. Generally speaking, there are two main approaches to consider if you have spare cash and want to pay down your debt:
The Snowball method — involves paying off the lowest balance first. After your lowest balance is cleared, focus on and allocate your payments to the next lowest balance. Continue this until you've paid off all your balances.
The Avalanche method — prioritises paying off your loan with the highest interest rate first. Once you pay off your highest-rate debt, transfer your payments to your second-highest-rate debt until it's also paid off. Then continue this until you've paid off all your prioritised debts.
Funding Your Goals
Have you discussed your goals with your advisor yet? What do you want to achieve for 2024 and beyond? Could it be a down payment for a home, funding your retirement, or setting aside something for the kids? Once you have listed the things you wish to achieve, prioritise them. The goals at the top of your list should be those that you tackle and create a plan for first. Planning for that goal could involve setting out a specific savings plan for it, and investing your money. Simple questions to ask yourself when mapping out that goal can include:
What's your desired end goal?
How flexible or strict does this goal need to be - i.e. it cannot fail or are there variations in the possible outcome?
How much will you invest each month or year? Will this amount rise over time?
How much risk are you comfortable with?
Build an Emergency Buffer
It's important to have an emergency fund in place to cover unexpected financial hardships such as a job loss or a medical emergency. Most financial planning norms suggest putting aside at least 6 to 12 months of living expenses for emergency savings. A good amount to consider is one that you can be comfortable with — saving too little can expose you to unnecessary risks while keeping too much aside is an opportunity cost for your cash.
An Advisor Can Help
Obviously anyone can create and think about these plans by themselves. However, you may not have the time, willingness, or confidence to do it on your own. If you're looking for help, consider letting an independent advisor do the work for you. We can create a personalized plan based on your financial goals and circumstances, track your progress, and adjust your plan along the way. Most importantly, we are here to walk with you hand in hand, guiding you whenever markets are turbulent and uncertainty is at its highest.
To find out more, come and have a chat with us.
