Going into a new year is a good time to nip some bad financial habits in the bud or create a new-and-improved way of doing things. With finances, sometimes small changes can make a big impact. As you’re considering what you’d like to accomplish in 2024, here are some ideas that could reap rewards in the long run.
Pay yourself first
If you’re not already setting aside a little money into savings each month, you’re missing out on a huge opportunity to build a nest egg to help with financial emergencies. Whether it’s an unexpected home or car repair or an urgent medical issue, those kinds of expenses can really throw off your budget. A great way to build your savings without missing the money is to utilize direct deposit and automatic transfers that put part of your paycheck into a different account you don’t ever see. Out of sight, out of mind and the savings will add up quickly. At Solarity, you can easily open additional savings accounts - for free - and label each one for the goal you're working on. Wouldn't it be nice to see the dollars stack up in that account set aside solely for your dream vacation in 2024?
Map out big-ticket items
Now and in the future, it’s important to save for big expenses - both planned and unplanned. If it’s a more immediate cost, start setting aside money with each paycheck into your savings or money market account. If the big expense is a few years out, you might consider a certificate, which typically pays higher rates than a savings account.
Pay down debt
Getting out of debt is a game-changer. Plan to tackle your most costly debt first: credit cards. Carrying a balance can really add up over time. If your balance is on the larger side, consider consolidating your debt into a home equity line of credit (HELOC). By paying back the debt in a timely manner and at a lower interest rate, you’ll likely save money in the long run. If you have student loans or other debt, tackle the highest interest rates first and give yourself a realistic timeline when you can pay it off. It’s nice to have your eye on the prize.
Pump up your credit score
As you well know, a strong credit score is key to your financial freedom. It's an important consideration when lenders are deciding whether or not to loan you money. Securing or maintaining an excellent credit score is so important to strengthening your financial choices and growing your wealth. A top way to accomplish this is by keeping your older lines of credit open, even if you rarely use them. Read more about boosting your credit score including five things you should be doing right now.
Revisit your insurance options
Some financial industry experts recommend shopping for insurance - home and auto specifically - at least once a year. Do you have the coverage you need? Are you spending too much or are there any cost savings to be found? Lifestyles change. Perhaps you're driving far less and working from home more often. Ensure your auto insurance coverage reflects your daily life. For your homeowner's policy, make sure you are covered for any improvements you've made and/or increases in your home's value (i.e. replacement cost).
Invest in your future
Where will you be in 5, 10, 20 or 30 years? There are a number of handy retirement calculators that help you understand the amount of money you’ll need for the lifestyle you plan to lead when you retire. Investing your money is a key way to build your wealth. And thinking about that future includes your real estate investment. How is your current home loan working for you? Is a home loan refinance a good option for you? Additionally, if you’re gearing up for a home purchase, how much house can you now afford? Solarity’s expert Home Loan Guides will partner with you to walk you through your options (with no obligation to apply).
Protect your loved ones
Ensuring your estate and will are in order is one of the greatest gifts you can give your loved ones. Without a clear path of what will happen to your assets in the event of your passing, it can be an incredibly difficult task for your family to take on, in addition to grieving their loss. Simply ensuring both your beneficiaries and your will is up-to-date is a great first step.