New Year Financial Planning Tips

1/19/2024 1:00:00 PM

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When it comes to financial planning, it can be useful to take some time to reflect on the prior year to celebrate your successes and critique any areas of struggle. With that information in hand, you can begin to evaluate and plan for the next 12 months. Here are some steps you can take to start the new year right.

Review your current budget or spending habits: Use an app or online banking to help categorize and understand your money habits. Are you spending too much in a given area? Could you be saving more? If you had a budget for 2023, look at whether it’s still applicable or whether you need to adjust it moving forward.

Pay yourself first: If you received a pay raise at work at the end of the year, one of the easiest and most effective ways to increase your savings is to simultaneously increase your retirement contributions when your raise takes effect.

Increasing your contributions to your retirement 401(k) plan, Health Savings Account or other long-term savings vehicle can be a great way to add to your savings without changing your current lifestyle. Out of sight, out of mind.

Max out your IRA contributions: How much did you contribute to your Traditional or Roth IRA plans in 2023? If you haven’t contributed the maximum amount yet ($6,500, or $7,500 if you’re 50 or older), look at what you need to do prior to the tax deadline, if you’re eligible. Perhaps you can repurpose a bonus or tax refund to complete these contributions, depending on your situation.

Review your insurance coverage: Because of the impact of high inflation, it’s important to review the coverage and premiums of your auto, home, life, disability and long-term care insurance to see if your policies remain appropriate for your financial situation. If it has been several years since you last reviewed your insurance, it may be a good idea to shop around and see if you can save any money on your premiums without reducing your coverage level.

Plan ahead: In addition to planning for 2024, it might also be a good idea to begin planning even further out, as the current tax environment is scheduled to sunset at the end of 2025. At that point, current tax brackets will revert back to levels that likely will result in higher taxes for most individuals. Are there things you can do now to take advantage of today’s lower tax rates?

Along with those steps, other ways you can prepare for the coming year include:

  • Review your investment allocation to make sure it continues to meet your timeline for accomplishing your goals and still aligns with your risk tolerance.
  • Obtain a free copy of your credit report to ensure its accuracy.
  • Review your tax situation, including your current withholdings on your paycheck, annual giving to charitable organizations, etc.
  • Review the beneficiaries listed on your accounts and life insurance, and review your estate planning documents to ensure they continue to be accurate and up to date with your wishes. These designations and documents should be reviewed on a regular basis.

This article was published in the Q1 2024 issue of the Bell Wealth Newsletter. 



Matt Bushard

Senior Portfolio Manager, CFP®

Products and services offered through Bell Bank Wealth Management are: Not FDIC insured | No Bank Guarantee | May lose value | Not a deposit | Not insured by any federal government agency.