The end of the year is often a time of reflection and looking ahead to new beginnings. It’s also when many Americans set New Year’s resolutions — including those that revolve around personal finances.
Whether you’re looking to spend less, save more, pay down debt, increase your retirement funds or make a large purchase such as a house or car, setting your financial intentions going into 2024 is a great way to make sure the year gets off on the right foot. To set the best goals for yourself, though, you’ll need to do some homework first.
Diana Macias, a Primerica Representative located in Miami, FL, knows just how important it is to be financially prepared for the future — and how the lack of education can create barriers to financial success, especially for middle-income families.
“We’re taught how to make money and spend it, but rarely how to plan with it, invest it or grow it,” she says. “I know that everyone regardless of their background or current income can have a better, brighter financial future. And I plan to share this with as many people as I can.”
Whether you’re just starting out or already well on your way to financial security, incorporating better financial practices in your daily life can help guide your New Year’s financial resolutions and ensure that 2024 is the year you get on the path to a brighter financial future. Macias educates her clients on these essential principles, and many others, as part of her thriving Primerica business.
Start saving now — not later
If you want to be financially independent, the sooner you start setting money aside the better. In fact, some might say there’s a penalty to putting off saving for the future called the high cost of waiting. The longer you wait to start saving, the more you’ll have to put away each month to reach your retirement goals. The sooner you start, the fewer dollars it will take.
If you’re years into your career and haven’t started saving or have only put a little aside, use the start of the new year to take a good, hard look at where you are and where you want to be a year — and even 10-20 years — from now. With that assessment in mind, you can then begin to make a plan that focuses on setting — and sticking to — a budget, paying down debt and saving for the future.
The high cost of waiting will only get higher the longer you wait, so don’t procrastinate or get stuck thinking you’re already too far behind to ever catch up. Even if you haven’t set aside much money, you still have time to course correct because it’s never too late to start.
Pay yourself first
You pay your bills each month, so why not do the same with your savings? Treating your savings like any other recurring bill is a great way to set money aside without needing to put too much thought or effort into it. You can also create an automatic recurring payment to your savings or retirement account just like you would for any other monthly bill. And if you think you don’t make enough money to save some of it, then think again. Commit to paying yourself first and deposit a set amount each and every
month into an investment program.
If you don’t already set aside a portion of your income each month, kick off the new year by creating an automatic transfer of 10% of each paycheck into a savings or retirement account. If 10% seems too high, then start by saving a bit less with the goal to increase your savings over time. It’s amazing how your money can grow if you invest even a small amount regularly at a good rate of return.
Calculate how long it will take to double your money
Do you know The Rule of 72? It’s an easy way to calculate just how long it’s going to take for your money to double. Take the number 72 and divide it by the rate of return you hope to earn, such as 3%, 6% or 12%. That number gives you the approximate number of years it will take for your money to double.
For example, with $10,000 at a 3% rate of return means your money will double to $20,000 in 24 years. But consider that same amount at a 6% rate will cut that time in half to just 12 years. A 12% rate cuts that time in half again, meaning it would only take 6 years for your $10,000 to double to $20,000.
Going through this easy math exercise as you set your financial resolutions for 2024 is a good way to see how much money you can save over the long haul.
Leverage the power of compound interest
The power of compound interest shows how you can really put your money to work and watch it grow. When you earn interest on savings, that interest then earns interest on itself and this amount is compounded over time. The higher the interest, the more your money grows. With the power of compound interest at work for you, you’ll be amazed at how quickly a few hundred dollars can become a thousand.
Coupled with the other financial tools above, leveraging the power of compound interest shows how small steps today can lead to big gains tomorrow when it comes to financial security. As you look at your personal finances in the new year, use your new financial knowledge to build a promising future you — and your family — can be proud of.
“Now, more than ever, I understand why financial education is so important,” Macias says. “My daughter and mother are the most precious people in my life, and to know that I am financially prepared for the unexpected gives me a great sense of peace and fulfillment. I know my family can count on me if something unexpected comes along – and I encourage my clients to follow these simple principles so that they too can be better prepared for whatever the future may bring.”
Important Disclosures:
Primerica Representatives market financial services products including term life insurance by Primerica Life Insurance Company: Executive Offices: Duluth, Georgia; and in New York by National Benefit Life Insurance Company, home Office: Long Island City, New York. Securities offered by PFS Investments Inc. (PFSI), 1 Primerica Parkway, Duluth, GA 30099-0001, member FINRA (www.finra.org). Primerica, Inc. and PFSI are affiliated entities.
Content is for educational and informational purposes only and should not be considered investment advice or a recommendation.
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