Ridofranz / iStock.com As the new year unfolds, it’s still a good time to establish (or reestablish) your financial goals and then take steps to reach them. No matter where you are in your financial journey, you can always improve. If you’re looking to level up with money and investing in 2024, these tips will help. Read More: 6 Genius Things All Wealthy People Do With Their Money 1. Create a Budget Also known as a spending plan, this financial power tool helps you direct your money exactly where you want it to go, according to your financial goals. A structured spending plan allows you to direct your hard-earned money into life’s priorities, such as retirement savings, debt reduction, college funds or planning for that dream vacation. With your budget, you’ll give direction to your money instead of letting it slip through your fingers each month. For those who want to invest more, a budget is a foundational financial tool that allows you to increase your investments over time. Adding a line item for investing can make sure it gets done so that you can start building wealth sooner rather than later. If you’ve never created a budget or don’t know how it works, there are plenty of resources out there, like books, videos and apps that can help you get started with this wise money practice. Money move: Commitment to creating and adhering to a spending plan for each month of the year. 2. Fast-Track Debt Elimination It’s challenging to invest if a large chunk of your income is going towards debt repayment. There’s no better time than the present to get rid of the pesky interest payments that come with loads of debt. A proactive approach to minimizing and paying off debt frees up more money for investing and wealth building. The goal is to have compound interest work in your favor rather than against you. Funds tied up in steep interest payments cannot be invested towards your financial freedom! Money move: Add up all of your debt, then make a plan to reduce it and, eventually, eliminate it. Research debt repayment methods like the debt snowball, debt avalanche, velocity banking, etc. 3. Establish Your Emergency Fund Households that use debt to cover basic needs will benefit from having an emergency savings fund. This way, when an unexpected expense comes up, there’s no need to go deeper into debt. Based on your household size and financial situation, consider setting aside an emergency buffer ranging from $1,000 to $3,000. If you can, you can also aim to save six to 12 months of expenses. Once you are an expert saver, you should also consider setting up sinking funds as well. Sinking funds help you save up for larger expenses on the horizon. This might include car repairs, property taxes or a new appliance purchase. Money move: Decide how much you want to put in your emergency fund and create a plan to reach that number. Create additional sinking funds to account for larger financial obligations that arise throughout the year. 4. Stay Consistent With Your Investments Mark Henry is the founder and CEO of Alloy Wealth Management. He says that consistently adding to investments is key, “As you are in your early and mid-working years you want to regularly be investing, whether it be through a 401(k) or another option. Consistently adding to your investments means you are buying at all different levels of the market, and over time this creates wealth.” Money move: Enroll in your employer-sponsored retirement program or create a brokerage account that you’ll consistently add money to for the purpose of investing. 5. Automate Your Investments One of the best things you can do to build wealth is to make sure your contributions are on auto-pilot. If it’s something you have to do manually every week or every month, you’re more likely to forget to do it. True Tamplin is a Certified Educator in Personal Finance and founder of Finance Strategists. He suggests, “Setting up automatic contributions to your investment accounts can help you stay consistent with your investment goals and take advantage of dollar-cost averaging, where you buy more shares when prices are low and fewer when prices are high.” Money move: Set aside a portion of your paycheck each month to contribute to an investment account. 6. Adjust Your Portfolio as Needed This is also known as rebalancing, and it can be necessary when the market shifts or your circumstances change. For instance, if you are nearing retirement, you may want to move your nest egg from less volatile investments to ones designed to outpace inflation and preserve your wealth. Mark Henry explains, “You need to be reevaluating your investment strategy and risk tolerance as you get closer to retirement. The closer to retirement the less risk you will want to be taking. At a certain point, you have to start thinking differently about your investments and move to a more defensive strategy to protect what you have.” Money moves: Speak with your financial advisor or a financial position on how to best allocate your portfolio’s holdings based on your present financial circumstances. 7. Consider Index Funds If you don’t want to take time to research individual stocks, you can invest in low-cost index funds, which are funds made up of several stocks. A fund manager chooses the investments in the fund, and you simply contribute to the level you feel comfortable with. True Tamplin, says, “Index funds are a great way to invest in a broad swath of the market without picking individual stocks. They tend to have lower fees than actively managed funds, which can eat into your returns over time. According to Vanguard, the average expense ratio for their index funds is about 0.06%, compared to the industry average of 0.57% for actively managed funds.” Money move: Research and invest in index funds, adding as much as possible to your positions. 8. Trust the Plan Investors can be tempted to pull out of the market during a downturn, but this can be counterproductive to your investing goals. Market fluctuations and dips are part of the investing process, so don’t panic when it appears that your money seems to evaporate overnight. Instead, trust your plan, continue to invest and don’t let market dips send you into a panic or cause you to pull your money out prematurely. A steadfast approach that endures through market volatility makes you more likely to optimize your investment returns. Money move: Stay the course during market fluctuations. History has shown that perseverance can pay off, with patience and a long-term perspective being keys to successful investing. This article originally appeared on GOBankingRates.com: 8 Smart Investing Money Moves for 2024 Source link Post Views: 1 Post navigation Got $1,000 to Invest in Stocks? Put It in This ETF.