By: Chip & Jamie Hunt

This year make your financial health a top priority.

Use this checklist to serve as your guide to an organized approach for assessing and monitoring your financial security. It’s a resolution that not only promotes fiscal responsibility for you and your family, but also empowers you to make informed decisions about your money, fostering a sense of control, peace of mind, and confidence in a brighter future.

1. Review Your Budget

• Assess and update based on changes in income, expenses, and goals.
• Identify areas for cost-cutting or reallocation.

Dive into the intricacies of your budget, assessing shifts in income, expenses, and goals. If you already track your spending to see where your money is going, this should be simple. Seek to uncover areas of over-spending and adjust accordingly.

OUR TIP: Take advantage of great budgeting technologies that are available online. There are some excellent, user-friendly, free tools available that take the pain out of budgeting by automating the budgeting process for you.

2. Make Sure Your Emergency Fund is Intact

• Ensure your emergency fund is adequate.
• Shift to a high-interest savings account for optimal returns.

The beginning of the year is a great opportunity to take inventory of your emergency savings fund. Many Americans enthusiastically overspend during the holidays only to discover in January that they have depleted their savings. You should ideally have at least three to six months’ worth of essential expenses stashed away in a savings account for unexpected emergencies.

OUR TIP: If your emergency savings account is sitting in a bank that pays near-zero interest, it’s time to shift your emergency fund to a high-interest savings account that pays somewhere between 4% to 5%. This should be as easy as calling your bank and letting them know that you are looking for a high-interest savings or money market account.

3. Debt Management

• Review and plan payoff for high-interest debts.
• Explore balance transfer credit cards for interest savings.

If you have credit card debt, or other high-interest debt, now is the time to develop a strategy to pay it off. It’s worth mentioning here that we often see people with low-rate mortgages making “excess payments” to their mortgage to pay off their house faster. It is our opinion that you would be better off re-directing those “excess payments” to pay off high-interest debts first.

OUR TIP: Speaking of low rates… if you want a quick way to save money on credit card interest, investigate a balance transfer credit card to help you get out of debt faster. If your credit score is good enough to qualify, these cards can give you 0% APR for 12 months (or more), which converts your high-interest charges to zero-interest charges… saving you money so you can pay off the debt faster.

4. Check Your Credit Report

• Obtain and review for errors or discrepancies.
• Utilize credit monitoring services for real-time updates.

Obtain a free copy of your credit report from each of the major credit bureaus (Equifax, Experian, and TransUnion) at least once a year. You can use AnnualCreditReport.com for this purpose. Regularly checking your credit report helps you detect any suspicious activity that may indicate identity theft. Dispute any discrepancies you find with the credit bureau to have them corrected.

OUR TIP: Not many people realize that they can utilize the FICO score provided by their bank and credit card companies to track their credit. Consider using credit monitoring services that provide real-time updates and alerts for any changes to your credit report.

5. Review Your Retirement Plan

• Determine if your retirement account is “on-track”.
• Utilize online calculators for quick assessments and explore extra savings options.
• Ensure your named beneficiaries are correct.

The beginning of the year is the perfect time for a review to determine if you’re saving enough for retirement.

Here are a few quick moves you can make as part of your review.

• Determine if you are “on-track” with the savings that you have accumulated so far. Most major 401(k) plan service providers (Empower, Fidelity, Principal, etc.) have online calculation engines to help you determine if your accumulated retirement savings is “on-track”. Alternatively, you can request your FREE copy of our “retirement savings checkpoints” chart that you can use as a guide to help you determine if you are “on-track”.
• Use a traditional IRA for extra retirement savings. Your company’s 401(k) isn’t the only way to save for retirement. Even if you’re maxing out your 401(k) at work, you can put up to an extra $7,000 for 2024 into an individual retirement account (IRA).
• Make Catch-up contributions. If you’re in the 50-and-over age group, you can save an extra $7,500 per year in your 401(k) or an extra $1,000 in an IRA by way of so-called “Catch-up” contributions.

OUR TIP: If you need extra help, typically your company’s 401(k) plan provider has a licensed team of retirement professionals that are available to help answer your questions. Retirement income planning can be confusing. After all, how does one know how much money they will need to accumulate for retirement? If you feel that you need extra help, reach out to us and we will be delighted to help with your questions.

6. Investment Portfolio

• Rebalance for optimal risk tolerance in changed market conditions.
• Leverage higher interest rates for strategic portfolio adjustments.

Market conditions have changed dramatically over the last year, so it’s a great time to review your portfolio’s investment mix. The Fed has hiked rates 11 times since March 2022. As a result, bonds and bond mutual funds are generating higher yields and banks are now offering higher rates on savings products and CDs. Today, you can expect to get 4% to 5% yields on bonds, bond funds, and CDs.

OUR TIP: Higher interest rates provide you with an opportune time to reduce portfolio risk by replacing some higher-risk investment holdings with safer fixed income instruments that are finally generating reasonable investment income.  

Remember, this checklist is a general guide, and individuals may have unique circumstances that require additional considerations. It’s advisable to consult with a qualified financial advisor for personalized advice based on your specific financial situation and goals.

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About the authors:

Chip Hunt is the founder and President of PrimeTRUST Advisors, an investment advisory firm dedicated to helping individuals and institutions with their retirement plan. His desire to embrace the true fiduciary role (working for the best interest of others) motivated him to launch the firm in 2006 to transform this belief into a reality. (full bio)

Jamie Hunt is vice president and serves as the firm’s Chief Investment Strategist. He particularly enjoys taking time to discuss investment and planning strategies with clients to ensure they are fully versed and actively engaged in decisions leading to the development their plan. (full bio)

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The authors used AI based on their input prompts and knowledge of the topics to generate some content. The content was reviewed and edited by the authors to ensure accuracy.