Read time: 3.5 minutes
One of the most important lessons I’ve learned about building wealth is to be proactive with it.
So as 2024 comes to an end, now is the perfect time to make sure you covered all your financial bases.
Here are 5 things you should do (financially) before 2024 is over so you can set yourself up for a successful 2025.
Rebuild it
If 2024 threw some (unfortunate) surprises at you and you had to spend some or all of your emergency fund, now is the best time to rebuild it.
The last thing you want is to realize you don’t have enough money AFTER you run into an emergency.
Aim to keep 3 to 6 months of essential expenses in your emergency fund at all times. So if you typically spend $3k a month on essentials, you want to keep between $9k to $18k in your emergency fund.
My suggestion is to keep all this in a High-Yield Savings Account (HYSA) to make the most of your money.
Get your free money
25% of workers with 401(k)s don’t contribute enough to get their full employer’s match, meaning they’re leaving free money on the table.
An employer’s match in a 401(k) is additional money that your employer gives you to match your own 401(k) contributions.
For example:
If you make $60k a year and your employer matches 100% of your contributions up to 6% of your salary
And you contribute $3.6k into your 401(k), then your employer will match you and give you another $3.6k
In total, you’d have $7.2k in your $401(k).
That’s an instant 100% return on your money.
So here’s your reminder to use the last few weeks to max out your 401(k) up to your employers match.
Set a BHAG
If you want to start 2025 with a bang, you need to set a…
BIG HAIRY AUDACIOUS (Savings) GOAL — a savings number that’s wildly, and I mean wildly, ambitious.
I LOVE setting these kinds of goals even though I know there’s a slim chance I’ll achieve them because…
The point is to force yourself to think BIGGER than you ever thought possible so you do everything you can to try and achieve it.
You’re more likely to proactively look for solutions, ask for help, cut expenses, and build good financial discipline.
…And the thing is, setting “unrealistic” goals lead to BETTER results than setting “realistic” ones.
When you shoot for the moon, even if you miss, you’ll land among the stars.
PS: By the way, I’m excited to announce that the $1k 5-Day Savings Challenge will be back for the New Year! We had thousands participate in the last one and I can’t wait to host it again. If you’re interested, I’m sharing more details in the next few newsletters so keep your eyes peeled!
Rebalance & optimize
The stock market did great in 2024 but…
This means your portfolio allocation is probably out of whack.
If you started 2024 with a 60% stocks and 40% bonds allocation
Then, by the end of 2024, it could be at 80% stocks and 20% bonds
You might be okay with it right now because the stock market is up but if the stock market starts to go down, you might be taking on more risk than you’re comfortable with.
Here are 2 ways to rebalance your portfolio:
Sell the winners and reinvest the money into an underweight asset class
Invest “new” money into the underweight asset class to get back to your optimal allocation
I prefer the 2nd way because it doesn’t trigger a taxable event BUT it does require investing more money.
Use it or lose it
Make sure you use up all the money in your Flexible Spending Account (FSA) because…
If you don’t use it by the end of 2024, it’ll ALL EXPIRE.
Thankfully, there are a bunch of things you can use your FSA money on other than doctor visits or new glasses.
Here’s a list of qualified things you can stock up on:
Suncare products with SPF15+
Band-aids, gauze etc
Aspirin/Tylenol, ibuprofen, Vicks
Acne creams
Sanitizers, masks, PPE etc.
Baby wipes
New YouTube video
I’m sharing 13 of my favorite money and investing books that changed my life. So if you’re an avid reader, looking for holiday gifts, or just want to start reading more in the New Year, you don’t want to miss this.
My favorite things this week
Granola – I’m a huge snacker. I love chips and crunchy things but unfortunately they’re not the healthiest thing to binge on late at night. In an attempt to eat healthier, I bought 2 bags of granola from Costco and they’re absolutely delicious. I mix them with frozen berries and Greek yogurt for breakfast. Easy, healthy and delicious.
Thrift shops – I stumbled into a thrift shop the other day (not those overpriced hipster-y ones) and I scooped up a bunch of GREAT deals. I got a 100% wool overcoat that was made in the USA for $10 and $400 leather loafers for just $12. I can’t wait to go back.
Last words
We’re making a couple exciting changes to the ReThinkable newsletter based on your feedback and suggestions! If you haven’t yet, I’d appreciate it if you could take some time and share your feedback here.
To making smarter money moves,
Vincent
Was this forwarded to you? Sign up here.