Yahoo Finance Inflation, Investments and Income: Your Comprehensive Guide to 2024 Finances
Fifty-nine percent of adults who responded to a recent GOBankingRates survey predict a recession for next year. Many experts agree that a recession is possible, if not likely.
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“Our baseline outlook at PNC is for a mild recession to start in mid-2024 as high interest rates continue to weigh on the economy,” said Gus Faucher, chief economist at PNC Financial Services Group.
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With this in mind, you may be looking for a road map to help you strengthen your finances in the year ahead. Here are five ways to step into 2024 financially prepared.
Start 2024 With a Realistic Budget
Experts typically agree that a budget makes financial decisions easier. “The first step of budgeting is to take a good look at your spending habits to determine where your money is going,” according to a blog post about 2024 financial resolutions on the Truist website.
You can use one of any number of apps to analyze your spending and take control of your money. You might be surprised by how much cash you can free up by canceling subscriptions you don’t need or shopping around for better rates on insurance, utilities and other services.
Build Up Your Emergency Savings
Financial experts like Suze Orman agree that starting an emergency savings fund should be one of your top financial priorities. Even if you can only set aside $100 a month, it will create a sense of security that could shift your money mindset, she indicated in a recent interview with GOBankingRates.
Ideally, you want to aim to have at least three to six months of living expenses set aside in a high-yield savings account that you can access easily. Also consider having cash in an account that would cover any deductibles on home, auto and health insurance.
Evaluate Your Insurance Coverage
The new year is a good time to look at your insurance coverage and rates, according Truist.
Are you protected in the event of catastrophic damage to your home? Would your loved ones be okay financially if you couldn’t work or passed away?
“If your will isn’t already in place and up to date, take time this year to meet with an experienced lawyer or estate planning attorney to prepare or update your will so you can make sure your loved ones are cared for no matter what,” the Truist blog advised.
Hedge Against Inflation and High Interest Rates by Paying Down Debt
The average credit card interest rate is 22.77%, according to the most recent data from the Federal Reserve. The best security net you can build for yourself in 2024 is to begin paying down high-interest credit card debt. That can help increase your credit score, giving you access to lower interest rates for a home, car or other major purchases and providing a sense of security in hard economic times.
Evaluate Your Investment Portfolio
The new year is a good time to take stock of your investment portfolio. You may want to consider diversifying into areas that are likely to be more resilient during a recession.
If you aren’t already saving for retirement, speak with a financial planner for the best ways to get started. This should be a priority, whatever your age. Truist recommended investing at least 10% of your pre-tax income toward retirement.
Find Ways To Increase Your Income
It’s no secret that the cost of virtually everything, from loans to groceries, has increased in 2023. After creating your budget, you may realize you need more income to meet your financial goals.
You might consider the following tactics:
Finding a side gig, such as driving for Uber or renting your car through an app like Turo
Asking your boss for a raise
Starting a side business you can do from home
An extra $100 or $1,000 a week could make a big difference in achieving your financial objectives.
Set Aside Money for Fun
It’s important to build financially responsible habits. But you don’t want to sacrifice too much or you won’t stick with your plan. Build room in your budget for fun, even if it means an additional savings account for vacation or purchases you’d like to have.
“If you’re on track with your other savings goals, adding in a short-term goal for something you want, but maybe don’t need (like a monthly night out with friends) can be a great way to steadily reward yourself,” according to Truist.
Final Note
Taking small steps can lead to good habits. If you follow these tips, you may find yourself in a better financial place at the end of 2024.
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This article originally appeared on GOBankingRates.com: Inflation, Investments and Income: Your Comprehensive Guide to 2024 Finances
