Before the year draws to a close, conduct a year-end financial check-up to ensure you meet your financial goals. Here are 10 key areas that require your attention as you assess your finances and plan for 2024:
- Savings: Are you getting the most interest on your savings? Consider exploring higher-yield savings accounts and certificates of deposit your financial institution offers.
- Emergency Savings Account: Inflation drove up prices this year. Have you saved enough to cover them? Create a financial buffer against those costs and unexpected expenses so that they don’t knock your long-term financial plans off track.
- Loans: Is it time to refinance? You could save money if interest rates are lower now than when you took out your loan. Read the terms and interest rates on your home and car loans for caveats such as a penalty for an early payoff. And make sure you can comfortably manage the new payments.
- Credit Cards: Did you load up on high-interest credit card debt this year? Calculate the total outstanding balance and interest rates on your cards. Then, develop a plan to pay off high-interest cards first and consider consolidating them into a lower-rate personal loan or line of credit.
- Student Loans: Are you or a dependent eligible for loan forgiveness? Investigate that opportunity and ways to improve the terms, interest rates, and repayment plans. You may find that you can pay off those debts faster and easier.
- Stocks: Review your stock market portfolio. Are you getting the return – appreciation or dividends –you wanted to see this year? Maybe it’s time to rebalance your portfolio. If you're unsure about your investment strategy, seek advice from a financial advisor.
- Insurance: Do you have enough of the right coverage for your home, car, and life? Make sure that your coverage aligns with your current needs and circumstances. Look for potential cost savings by comparing quotes from different providers without reducing your protection.
- Estate Planning: How many years has it been since you updated your will? It’s time to reconsider the provisions if there have been significant life changes such as marriage, divorce, or recent additions to your family. Should you put assets into a trust? Review and update beneficiary designations to ensure they reflect your current wishes.
- Retirement Planning: Are you contributing enough to your 401(k) or similar retirement plan? Is Social Security accurately tracking your contributions? Check your retirement accounts to determine whether your paycheck contributions align with your long-term goals. And if you are nearing retirement, evaluate whether the risk profile matches your plans.
- Taxes: December is an excellent time to review your income and deductions. You still have time to take steps that could reduce your 2023 taxes. If you foresee a significant change in income or expenses, consult with a tax professional.
Tropical Financial Credit Union has created a special guide to help you take better control of your finances. Click here to receive a copy.