Reviewing your finances at the start of a new year may not be as exciting as making other resolutions like exercising, eating healthy, or taking steps to reduce stress in your life, but  financial health is  closely related. they are close relatives. Help in physical and mental health.1 

Good news: Improving your financial health is easier than you think. Here are six simple steps you can take to  set yourself up for financial success in 2024 and beyond. 

1. Review your family budget 

Start the year by re-examining your finances.Assess your average monthly income and your fixed and variable expenses and determine your  priorities for 2024 to create your best budget. It may be important to reassess your budget  now, as  inflation continues to rise, forcing households to spend more on essentials like food and gas. 

Having trouble getting started? Morgan Stanley’s financial management tools, available online, help you monitor your income and expenses and create customized budgets to optimize the performance of your money. 

2. Check your emergency fund 

It’s always a good idea to check that you have enough money set aside for a rainy day. But this is especially true  when the economy is slowing down from its steady pace. Economic growth picked up unexpectedly  in 2023, with GDP  in the third quarter growing at a solid 4.9% year-on-year rate and annualized inflation. But economists group Morgan Stanley Research believes growth will slow from here. They are from the US compared to the previous year.S. The GDP growth rate is from low to high every year 1.9% in 2024.2 

Especially during uncertain economic times, an emergency fund can help  you be financially prepared in the event of an emergency, such as a  loved one’s job change. A rule of thumb for an emergency fund is to have three to six months worth of living expenses stored in a safe and liquid account.

3. Fix your credit 

Even if you are already good at managing your debt, you should consider taking steps to  reduce and consolidate your debt. For example, if you’re expecting a raise or a year-end payment, consider applying for an additional amount to your high-income balance. 

Then think about ways to consolidate your credit balance. This can help you trade different interest rates on multiple loans, lines of credit  or cards for a  lower interest rate on one loan. Reducing the number of loans you take out will also help simplify your financial life and ease financial stress.You may want to ask your financial advisor about possible strategies.

4. Make sure you follow through on your goals 

Make sure you’re on track to achieve your goals, such as saving and investing for a healthy retirement. If recent market changes  or other factors have put you off for a while, work with a financial advisor to see how you can get back on track. 

If you’re still working on  your goals, talk to your financial advisor about new goals you want to achieve. For example, can you increase your contributions to your workplace retirement plan or your individual retirement account by 2023?Can I contribute  to this or another account in 2024? A Morgan Stanley financial advisor can help you take a holistic view of the year ahead and assess your progress toward your goals. 

5. Check your asset allocation 

Reexamine your asset allocation or consider how your stock, income and cash investments are divided in your portfolio. Your portfolio’s asset allocation should  reflect your different life stages and corresponding savings goals. For example, as you approach retirement, you might consider moving a portion of your portfolio to an asset allocation, such as bonds. Or, if recent gains or losses in the stock markets have caused your bank account to deviate from your current allocations, it’s time to rebalance. 

Remember, the closer you are to retirement age, the less able you are to absorb  stock market fluctuations. 

6.  Estate planning and insurance updates 

The new year is a good time to review and reflect: 

Create or update an estate plan: If you don’t have an estate plan that includes a will, power of attorney, or health care proxy, consider creating an estate plan a priority  for the coming year.Estate planning ensures that your assets are distributed according to your wishes. 

Update and review your life insurance policy: Make sure you have enough coverage to meet your family’s financial needs. If your current employer does not offer insurance, you may need to purchase your own insurance. If you currently have life insurance, it is important to access and optimize your coverage to adequately protect your assets, your life, and your loved ones. If your income has increased or  your credit has changed, now is the time 

Now is the perfect time to make sure your coverage meets your growing needs and provides comprehensive protection. By February 1st, many of us have forgotten our resolutions. To avoid 2024,  connect with a Morgan Stanley financial advisor to discuss your financial goals for the coming year.


Leave a Reply

Your email address will not be published. Required fields are marked *