Top 5 ways to revise your budget for the New Year
Only 23% of Americans update their budget annually.
The New Year is a time to set realistic goals, especially when it comes to your finances. According to a recent Fidelity survey, two-thirds (66%) of Americans will make a financial New Year’s resolution for 2024 — especially millennials (76%) and gen Z (75%).
Rebuilding your budget may be a worthwhile resolution. However, only 23% of people are updating their budget annually, based on research by Finder.
Here’s how to make your personal finances work smarter in 2024.
Find the best CD before rates drop
With fed rates slated to plummet, so, too, will current CD rates. Now might be the last chance to lock in a rate that works for your financial goals in 2024, so take advantage of them before they’re cut.
How much you should add to your CD depends on your income and financial goals. A CD can be a good way to save for unexpected expenses while accumulating interest with an APY locked in. Only 45% of Americans have an emergency fund, with baby boomers the least likely to save their money in one.
Aside from emergencies, a CD is also a safe and secure way to save for retirement. One in 10 people (11%) anticipate needing at least $2 million to retire comfortably, and only 24% are confident they’ll have enough saved up for retirement.
Budget for your kids’ allowance
Teaching your children good financial habits early on provides the building blocks for smarter money moves in later years.
Over two-thirds (68%) of US parents give their kids an allowance, allotting about $35 a week or $1,830 a year.
As kids get older, parents tend to be more generous with that sum, so it’s important to adjust your family’s budget accordingly. Parents of teens can also help them start building credit by choosing a debit card that works for them.
Learning early about credit is key to a successful financial future. A quarter of Americans said they could not manage their budget and finances without a credit card, and 38% rely on at least three credit cards.
Pay off your credit card debt
Revamping your budgeting strategy can help pay off your debt, as well. The average person carries almost $4,000 worth of credit card debt, with 28% reporting it’ll take them a year to pay it off.
Setting a budget and sticking to it is easier said than done but can help alleviate stress in the long run. Nearly eight in 10 (79%) Americans report being stressed with their current financial situation, with their credit card among the top five sources of stress.
If you’re still struggling to pay off your credit, tools such as debt consolidation loans can help you get out of debt more quickly. In fact, consolidating debt is the top way people use personal loans (38%).
Consider investing in stocks
No matter where you are in your financial journey, there are more options than ever to begin investing.
The average American has about $2,566 in stocks. While 34% are investing more conservatively amid market volatility, the new year may be an opportunity to rethink the 50-30-20 rule.
Women, in particular, may be missing out on this aspect of their investment portfolio, with only $1,200 in stocks compared to men, who have $5,000.
Invest in yourself by starting a side hustle or business
With self-employment becoming more common and entrepreneurship at its highest level since 1999, there’s never been a better time to consider becoming your own boss.
Unless you’re fully bootstrapped, though, you’ll probably need some financing. To that end, almost one in three (30%) self-employed Americans are considering a business loan, but 63% report feeling “slightly” or “somewhat” confident they’ll be approved for one.
The biggest barriers to financing a business? High APRs (47%) and revenue requirements (41%). One way to streamline the approval process is through no-doc business loans, which can fund your venture in as little as 24 hours. You’ll still need to fill out an application — but without having to dig up a ton of paperwork.
Revising your budget for the New Year can set you and your family up for financial success by bringing your short- and long-term goals to fruition.
Image source: Getty
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