3 Underrated Financial Decisions That Can Change Your Life
It’s that time again. Everyone is talking about New Year’s resolutions, and I’m no exception. To learn more about these less popular resolutions, we took a closer look at The Ascent’s research on 2024 financial resolutions. What I learned surprised me.
Here are some underrated resolutions that can have a huge positive impact on your life and personal finances.
1. Emergency fund savings
For my money, this is absolutely the best financial solution. Because it gives you peace of mind. I lived without an emergency fund my entire adult life until very recently, and I can promise you that living paycheck to paycheck with less money for surprise bills is extremely stressful. However, according to Ascent’s survey, only 8% of respondents said this was their financial goal for 2024.
Saving an emergency fund is a really cool thing you can do for your future self. Knowing that you can handle unplanned expenses (such as a big bill from the auto repair shop) can help you sleep better at night. And once you pay the interest, you can avoid going into debt and having emergencies cost you more money. As of August 2023, the Federal Reserve Bank of St. Louis found that the average credit card annual percentage rate was 21.19%. Trust me. It’s no fun knowing you’ll end up paying a similar amount on top of unplanned bills.
To make emergency savings easier, consider automating the process. That way, you won’t forget to save. And when you rely on one of the best high-yield savings accounts, you can make your money grow faster thanks to its high interest rate.
2. Invest more
Only 8% of survey respondents listed this as a goal they are pursuing in 2024. I understand the boredom of daily life and being caught up in the cost of living, but if you can invest more money for your future, it’s like building yourself a pair of wings so you can fly one day in the future.
Thankfully, now is a great time to be an investor. That’s because you have access to a ton of free and low-cost tools to make it easier. You also have options about what type of account you want to open. Taxable brokerage accounts offer flexibility, but they do not provide protection from taxes now or in the future.
If you want to be able to invest comfortably for many years between now and retirement, opening an IRA account may be a smarter choice. You can save money on taxes today by choosing a traditional IRA. However, if you want tax-free withdrawals in retirement, choose a Roth IRA. And if you have access to an employer-sponsored retirement account like a 401(k), it may be worth contributing to it. This is especially true if some of the money you put in is matched.
3. Build better financial habits
Yes, I know this seems a bit vague. But please continue to be with us. This was a financial goal mentioned by 5% of survey respondents, and could form a great foundation for a variety of money moves beyond 2024. What does this look like? Well, you can learn more about The Ascent’s personal finance coverage. We write about stories and developments that will shock you straight to the wallet.
If you’re serious about spending your money better, another great way is to find it. financial planner Let’s meet in the new year. They can review your finances with an impartial eye and make recommendations for budgeting and debt repayment. It can also be a great resource if you need help deciding how to invest for your future.
Just taking the time to check your bank account and credit card balances a few times a week can help your finances. Knowledge is power. Managing your balance has never been easier thanks to mobile banking apps. Speaking of these apps, they also come with some neat tools to help you budget and achieve your goals, and they even give you access to your FICO® score. Because this is the credit score used by 90% of lenders, knowing your credit score can help you decide which credit cards to apply for and get approved. Or, you may notice that something is wrong and your score is lower than expected.
As you can see, there are plenty of less flashy goals you can aim for in the new year. They may not make your friends and loved ones say “wow,” but they can really change your life for the better if you rely on them.
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