As 2023 comes to a close, it is important to review our financial goals and create a plan for success in 2024. The economic and financial markets underwent significant changes throughout the past year, so let’s get a head start for 2024 by considering the following financial resolutions:
Live Beneath Your Means / Build an Emergency Cash Reserve
The recent increase in credit card usage, as well as a rise in hardship withdrawals and loans from 401k/retirement plans, highlight the importance of living within our means. In a world where we often seek instant gratification, it is crucial to prioritize building an emergency cash reserve. Having such a safety net can help protect yourself from unforeseeable circumstances. Aim to accumulate at least 3-6 months of your monthly cash flow needed to use when needed in emergency situations.
Adopt a “Whatever it Takes” Attitude
In times of economic uncertainty, adopting a “whatever it takes” attitude is important. This attitude can benefit both your personal and professional life, emphasizing careful personal budgeting and a workplace mindset that positions you for increased responsibility and income. Consider looking for ways to add value at work beyond what is expected. Imagine you are the owner of the company you work for and that the success or failure of the business relies solely on you. What steps would you take to ensure success?
Understand Your Personal Financial Position
It is important to understand that managing your finances is not a one-size-fits-all approach. For young people, focusing on accumulating risk assets can be beneficial to lay a strong foundation for long-term wealth accumulation. On the other hand, pre-retirees and retirees should consider a balance between their need for short-term liquidity (i.e., a safety net) and defending against the long-term negative effects of inflation with risk assets.
The new year is right around the corner! In 2024, consider setting goals such as the ones discussed that can help you on your financial journey. As you work on these resolutions, remember to take the initiative and remain adaptable.
We wish you a happy and prosperous New Year!
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Marshall Clay CFP, J.D., is a Partner and Senior Advisor at The Welch Group, LLC, specializing in providing Fee-Only investment management and financial advice to families throughout the United States. Marshall is a graduate of the United States Military Academy in West Point, New York, the Cumberland School of Law in Birmingham, Alabama, and is a CERTIFIED FINANCIAL PLANNER™. In addition, Marshall is a frequent guest on local television stations as an expert on various financial planning matters.
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