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12.7.2023 / Financial Tips

How to Prepare Your Finances for the Year Ahead

According to a recent CNBC survey, 77% of Americans are anxious about their financial situation. As per the respondents, many are worried about increasing their savings, building retirement plans, and managing debt levels. Because of these worries, individuals reported feeling fatigued, having problems concentrating at work, and even getting proper sleep. Fortunately, there are various ways to effectively prepare your finances so you'll feel less stressed and more secure about your future. In fact, our previous article on ‘How to Not Overspend Around the Holidays’ shared that if you’ve managed to not overspend during the holidays by following a budget and making a gift list, you’re already on the right track in preparing your finances this year. So now, as we kickstart 2024, here are four more ways you can manage your finances:

Set financial goals

One way to get yourself in the right financial mindset is by setting some objectives. As a matter of fact, researchers from the Technical University of Darmstadt claim that by creating high and specific goals, you're more likely to remain persistent and motivated to attain those goals. This can include short-term goals that you aim to achieve by the end of the month or long-term goals that will help you secure your entire year. When it comes to establishing goals, it’s best to follow a SMART approach, which means specific, measurable, achievable, realistic, and time-bound goals. Doing so gives you a clear vision of where you want to be with your finances and assists you in keeping track of whether you’re reaching your objectives. Although it’s good to be ambitious, remember to set limitations so you can realistically attain your goals.

Look for options to build your wealth

That said, merely budgeting your money is not enough. For truly stable financial health, it's important to find ways to grow your money. Investing in stocks or bonds is among the most popular ways to do this, but they're not the only method you can do to increase your money. If you have enough money ready, you can also invest in real estate, as they’re less volatile than stock prices. Additionally, the value of real estate tends to increase over time, which means it can be a good and steady source of passive income if it’s for rent or when you sell it in the future. Alternatively, those with more modest budgets can invest in small online endeavors like startups or local stores. However, like most investments, it’s important to do your research and understand the risks involved. As advised by the US Securities and Exchange Commission, never invest in something you don’t understand.

Seek additional expert help

Not all of us are adept at managing our finances, especially when it involves complex concerns like the aforementioned investments. So if you’re unsure how to manage your own money, consulting with financial analysts trained in the best strategies is the best course of action. A post on financial analysts by Maryville University explains that they assess and examine your financial statements, allowing you to have a clear idea of your financial status. They can also recommend approaches that will let you attain the best possible financial results. For instance, financial analysts can suggest that you invest in some of the strongest stocks to build your wealth long-term. You can similarly consult with financial advisers as they can provide relevant financial recommendations on how you can achieve your immediate and future goals. They may also help you devise a financial plan that works for you. Ultimately, with the guidance of financial experts, you can rest assured that your hard-earned money will not go to waste.

Prepare an emergency fund

Finally, preparing your finances for possible economic challenges like rising inflation is essential. As we’ve seen in the past year, high inflation levels caused commodities and services to become more expensive. As per Forbes' year-end inflation report, the US saw rates rise by over 7.5%. This is in comparison to the 2% inflation rate targeted by Federal Reserve officers. One of the ways you can prepare for any economic challenges is to prepare an emergency fund. Doing so enables you to become financially equipped to face challenges in the future. For instance, if you suddenly lose your job, you won't go into panic mode since you have money stashed away in your account. And if any health issues come up, you won't have to rely on loans to pay your bills. To start an emergency fund, you can try setting aside around 10% of your monthly income. Ultimately, a secure emergency fund should be able to cover three months' worth of payables.

Whatever your needs or goals, these tips and strategies are a good place to start to secure your financial future in 2024!


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