Planning Your Finances for a New Year

Now that all the chaos that comes with preparing for the holidays and closing out the year is over, it's time to get organized. Act now to take advantage of opportunities to save on your tax bill and set some good financial habits.

Here are some ways to start your 2024 finances on the right foot:

• Review your 2023 budget. Take a look at what you spent and what you brought in last year. Did you make any major purchases, like a home or car, that you don’t expect to repeat in 2024? Are you planning on any big-ticket items this year? Where can you cut back? Can you expect a salary increase? Take this information to create a budget that you can start using right away.
• Make the most of what you have left over. If you were able to save more than you had originally planned last year, great job! You may want to make an extra mortgage payment—if you do that every year, you could cut your loan down by years and save thousands in interest. Or, if you carry a credit balance, you may want to make a big payment to reduce your debt. Another option is to increase your 401(k) or IRA contributions in January.
• Review your insurance coverage. Take a look at your health, life, homeowners and car insurance policies. You may find that you need to adjust your coverage or premiums or add dependents. This is also a good time to determine whether you need to purchase new coverage, such as life or disability. Major life events, like getting married or buying a house, trigger insurance changes.
• Create an estate plan. If you haven’t already, resolve to draft a will and create your estate plan next year. If you have a plan but it’s been a while since it was created, take a look and make sure it reflects your current situation. Estate plans help protect your family from legal troubles and tax burdens down the road. You don’t need to have a big estate to make it worthwhile.
• Automate what you can. Make your life simpler by automating your finances in 2024. Setting up automatic payments helps ensure your bills are paid on time and is much easier than sitting down with your checkbook and a stack of bills. You can track everything online to ensure that your accounts are balanced. The start of the year is also a good time to cancel any automatic subscriptions you aren’t using, such as video and music streaming, magazines, newspapers and more.

Your finances may seem a little out of control during the holiday season, but a new year brings a fresh start. Taking the time to sit down and think about your financial goals for the next 12 months should help bring some peace of mind. Happy planning!

Karen Brunetti can be reached at 615-743-8281 or karen.brunetti@pnfp.com.