Making New Year’s resolutions is very common, but those who do so often fail. In fact, only 9% of Americans who make decisions actually achieve what they set out to do.
While it may seem like a good idea to start working towards financial goals as the new year begins, there’s no reason to wait until January to start working on important money goals. In fact, you should start now so you can start building positive habits and maybe be among the minority of Americans who follow through on their plans.
Here are a few money goals you should start working on now instead of putting them off until January 1, 2024.
Paying off high interest debt
If you owe money on credit cards, payday loans, or other high-interest debt, there’s no reason to wait to start working to aggressively pay off your debt. Every month you owe these debts, you are hurting yourself.
Let’s say you have a $4,000 balance on a card with a 21.19% interest rate (the average interest rate for credit cards as of August 2023). On a 30-day billing cycle, you’ll incur a $70.26 interest charge. But if you start working to pay off your debt, make some extra payments, and get your balance down to $3,500 by January 1. Starting January 1, 2024, your monthly interest costs will be just $61.47.
Don’t wait for your debt to go down a bit, because when you’re being charged a high rate, every day counts. Start sending as much money as possible each month to the credit card or credit card that’s charging you the most.
We invest for your future
There’s little reason to delay putting money into a tax-advantaged retirement account held at a brokerage firm or investing in a 401(k) account if you have access to one at work.
A 401(k) often comes with a use-it-or-lose-it company match. In other words, if you don’t deposit the full amount required in 2023 to get your 2023 match, the money your employer will provide is lost forever.
Both 401(k)s and tax-advantaged retirement accounts held at brokerage firms (such as Roth or traditional IRAs) also have annual contribution limits. If you don’t make your 2023 contributions, you will forever lose the chance for a tax deduction you could have earned on your investments this year.
So don’t delay investing until 2024 and don’t miss out on the chance to earn this year’s matching contributions or tax savings; because you’ll never get that opportunity back (unless of course you invent a time machine, in which case investing in your future probably won’t be a big concern).
Spending in a way that makes sense for you
Finally, you shouldn’t wait to make a budget or spending plan that will allow you to prioritize the expenses that are most important to you. Many people spend without considering whether they are using their money in the way that will bring them the most happiness – while also saving enough to guarantee financial security tomorrow.
Don’t spend another few months without a budget, because you may be wasting money on things that don’t matter, rather than spending it intentionally. Adopt a budgeting method that works for you today.
The sooner you start these goals, the better off you’ll be; so take action now. You can celebrate your progress in January, when the rest of the world is just catching up on the decisions you’ve already made progress on.
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