Financial Advisor Insights

Financial Check-in 2024: 5 Steps to Kickstart Your Year with Success

Financial Check-in 2024: 5 Steps to Kickstart Your Year with Success
Jacob DuBose
January 3, 2024

It's that wonderful time of year again—a fresh start with the New Year! As you embark on this journey, you're faced with numerous exciting options for your "must-do" list this year. Perhaps, you're contemplating hitting the gym to prioritize your health and well-being. Or maybe, you're considering incorporating more veggies into your daily meals to nourish your body. And hey, don't forget about the simple yet essential tasks like changing the filter on your A/C unit at home to ensure optimal comfort throughout the year.

However, amidst all these fantastic aspirations, I wanted to make sure you also prioritize a financial check-in. Starting a new year offers a golden opportunity to create a fresh budget or take a moment to reflect on how the previous year went and make adjustments for the new one. So, let's dive right in and get started on your well-deserved financial check-in for 2024! Together, we can help pave the way to financial success and seize all the amazing opportunities this year has in store for you.

  1. Check the overall status of your credit accounts: There are several platforms where you can access a full annual credit report. The full report will show you all of the accounts that are reporting data to the tracking and rating agencies. Make sure all accounts and your overall score look good and that there are no surprises. Hopefully, everything is in line. If not, you might consider “freezing your credit”, with the major credit reporting agencies. Each of the agencies (Experian, Transunion, Equifax) will have a process for you to complete which includes some paperwork and you’ll need to supply proof of identity. This process is helpful to prevent credit fraud but shouldn’t be done without careful consideration. If you do see something unexpected on your credit report you could reach out to the credit reporting agencies directly–each will have some other options that you might consider. For example, Experian offers the ability to add a “Fraud Alert to your account, this will ensure that companies offering credit to an applicant go through extra verification steps.

  2. Review your Subscriptions (cash flow): Most subscription services are tied to promotional periods and changing terms. Please take a few moments to carefully review these subscriptions to ensure that there are no overlaps or duplications in your current subscription list. It's important to avoid unnecessary expenses and ensure that you are only subscribed to the services you truly need. Forbes reported earlier this year that 50% of people surveyed paid for subscriptions they don’t use. Avoid being one of those individuals who neglect to check regularly and miss out on savings.

  3. Insurance (property): Catastrophic weather, natural disasters, labor shortages, and the overall cost of goods due to inflation increased costs to insurance premium payers (ahem, that’s us) in 2023. And, experts expect this trend to continue into 2024. Check with your insurance professional (agent or broker) to make sure you have the appropriate level of coverage and see if you’re able to get a better deal for that coverage. Property and casualty insurance were not the only lines of coverage with higher costs this year. Insurance costs from health coverage to car coverage and everything in between were also affected. It might be a good year to have a comprehensive review of your overall coverage. This might uncover the need for “umbrella” Insurance or the ability to bundle coverage under a provider with similar coverage but lower cost. Finally, Insurance experts suggest an annual audit of your covered property. If something does happen to your property in 2024 or beyond, a complete list of what that property will be required. You might consider a video walkthrough of your property and a picture of serial numbers on high-value items, just in case.

  4. Bank account rates: Interest rates continued their march up in 2023, U.S. government-backed T-bills are yielding 5.4%. (Note that you have to hold them all year depending on how they’re structured). Be sure to ask your advisor. But, not all banks have increased savings rates to keep up. In fact, according to the FDIC, the average savings account is paying .42%. I understand that you probably like the bank you work with and that switching accounts can be a bit of a hassle or take up some of your time. But, if you have $10,000 in a savings account, for example, you would make a difference of over $500 in interest this year. Do you believe that the additional $500 is currently worthwhile, considering that it could potentially increase in value over the upcoming years if invested?

  5. Mortgage and Loans: Currently, most individuals would not benefit significantly from pursuing mortgage refinancing despite a recent drop in overall mortgage rates. But, you might want to think about switching your repayment schedule…say, to a bi-weekly which accomplishes essentially the same thing (same targeted monthly payment but you save in interest). Your mortgage is amortized which means it's paid over a predetermined time. And, the interest you pay on the loan is built into this repayment cycle. If you make additional payments you’ll decrease the time it takes to pay off your home loan which means you pay less interest. If you pay your mortgage payment every two weeks (for example) your payments will be counted toward your calculated interest sooner thus reducing the amount of interest you pay overall. A quick note on this one, this will feel like you’re paying your mortgage in advance in the beginning so if your cash flow is tight just be prepared. And, check with your lender to ensure that there is no fee to change your scheduled payment. I’d suggest a bi-weekly payment which will not change the amount of your mortgage payment but could save you thousands of dollars over the life of the loan. 

I have omitted a few perennial best practices for financial plan check-ins. These include regularly reviewing your goals to ensure they remain unchanged and aligned with your long-term aspirations. It's also crucial to assess the allocation of your assets towards those goals, considering any shifts in your financial landscape or personal circumstances. Furthermore, it's important to ensure that your financial documents are effectively structured for legacy planning, estate purposes, and tax optimization. These aspects play a significant role in safeguarding your financial well-being and ensuring a smooth transition for future generations.

While my focus has primarily been on changes that may have occurred or are anticipated in 2024, it's important to note that these adjustments are just a fraction of what a comprehensive financial plan should entail. Considering the dynamic nature of our financial lives, taking proactive steps towards establishing robust financial plans in 2024 would be the next move to secure your financial future.

In the meantime, the items above are actionable you can put them on your list of resolutions for 2024. Time is on your side when you make good financial decisions. So, get your year started right. Maybe you can call your mortgage company while you’re on the treadmill and ask if there is any cost to move your mortgage payment to bi-weekly. Or, call your Insurance broker while you’re switching out that air filter on the A/C unit.