by Amaka Watson
Smart year-end money moves include strategically paying down high-interest debt, rebalancing your investment portfolio, maximizing retirement contributions, assessing your emergency fund, and exploring tax-saving opportunities.
Now that 2023 is over, it’s time to take charge of your financial destiny. The rollercoaster ride of record-breaking housing prices and interest rate hikes has left many wondering what can be done to ensure financial success next year. Don’t worry! As the financial planning frenzy kicks in during the fourth quarter, we’ve compiled the Top 5 smart year-end money moves to set yourself up for success in 2024.
Strategic Debt Repayment Dance
Before drafting your resolutions for the new year, why not bid farewell to some lingering debt? Begin by strategically paying down high-interest debts, such as credit cards, to free up more funds for your financial goals. Consider creating a debt repayment plan that aligns with your budget, allowing you to enter 2024 with a lighter financial load.
Year-End Investment Portfolio Revamp
Dust off your investment portfolio and give it a year-end glow-up. Analyze your investment strategy, consider tax-loss harvesting, and rebalance your portfolio to ensure it aligns with your financial goals. The year-end is an opportune time to prune underperforming investments, welcoming in the new year with a revitalized and optimized investment plan.
Max Out Retirement Contributions
Seize the opportunity to maximize your retirement contributions. Whether you contribute to a 401(k) or an IRA, take advantage of the annual contribution limits. Not only does this move strengthen your retirement savings, but it also offers potential tax benefits. It’s like giving your future self a high-five while reducing your taxable income.
Evaluate Your Emergency Fund Fortifications
The unpredictability of life makes a fortified emergency fund an essential financial ally. Take a moment to assess your emergency fund’s current standing. Aim to set aside three to six months’ worth of living expenses in case of unforeseen financial storms. A robust emergency fund provides a financial safety net, ensuring you can confidently weather any unexpected setbacks.
Tap into Tax Efficiency
Familiarize yourself with potential tax-saving opportunities. Explore tax-efficient investment strategies, utilize health savings accounts (HSAs), and take advantage of tax credits and deductions. This proactive approach can lead to significant savings come tax season, allowing you to keep more of your hard-earned money.