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7 Financial Resolutions For 2024

With 2023 coming to an end, I’m sure most of us are coming up with our New Year’s Resolutions. Personally for me, one of those resolutions includes getting my finances in check! So if you’re like me, here are 7 financial resolutions for 2024 that you can do to win with money.

financial resolutions for 2024

#1 Create A Budget

Usually at this point of the year, many of you might have received your annual bonuses or have a clear idea of your salary increment for the upcoming year. So, there’s no better time than now to start planning your budget for 2024. 

Here are 5 quick steps to create your budget:

Step 1: Gather Financial Information

Begin by collecting all your financial data. This includes your current salary, expected increment, bonuses, other income sources, monthly expenses, debts, and savings.

Step 2: Use a Budget Planning Spreadsheet

Tools like a budget planning spreadsheet are instrumental in organizing your finances

You can start by duplicating our provided template. This spreadsheet should have sections for income, fixed expenses (like rent or mortgage payments), variable expenses (like groceries and entertainment), debts, and savings.

For a more detailed explanation of how to use this spreadsheet, you can check out this video we made. 

Step 3: Input Your Data

Fill in the spreadsheet with your financial information. Be as detailed as possible when listing your expenses and income to ensure a clear picture of your financial situation.

Step 4: Set Goals for Positive Cash Flow

The primary objective of budgeting is to ensure positive cash flow – where your income exceeds your expenses. This enables you to manage debts effectively, save for emergencies, and still have funds available for personal enjoyment.

Step 5: Regular Review and Adjustments

A budget is not static. Regularly review and adjust it as your financial situation changes or as you meet certain financial goals.

#2 Ensure Your Emergency Fund is Healthy

Maintaining a healthy emergency fund is a cornerstone of sound financial planning. It serves as a financial safety net for unexpected expenses, offering peace of mind and financial security. 

The size of your emergency fund can vary based on your personal circumstances, including your monthly expenses, income stability, and lifestyle. A good starting point is RM1,000, which can cover minor unexpected costs.

After that, you can gradually increase your emergency fund to cover 3-6 months’ worth of living expenses. This amount is generally recommended to provide adequate coverage in case of significant financial disruptions, like prolonged illness or unemployment.

#3 Plan For Inflation

The biggest concern for most Malaysians this year has been the rising cost of living. Everything is just becoming more and more expensive! 

This is why, for 2024, we need to start considering the impact of inflation on our finances especially since it can reduce the purchasing power of our money.

Here are some ways you can hedge against inflation:

1. Choosing the Right Savings Accounts

Opt for savings accounts that offer interest rates at or above the inflation rate. In Malaysia, a savings account should ideally offer at least 3% per annum to keep pace with inflation. This helps maintain the value of your savings over time.

2. Investing in Money Market Funds

Money market funds like TNG Go+, StashAway Simple, or Versa Cash often offer returns greater than 3% p.a. These funds invest in short-term financial instruments and can be more resilient to inflation compared to traditional savings accounts.

3. Diversifying Investments

Diversification is key in protecting your investments from inflation. Consider a mix of stocks, bonds, real estate, and other assets. Stocks, for instance, can offer returns that outpace inflation over the long term.

#4 Pay Off Your Debts

Paying off debts is a challenge that requires commitment, strategy, and sometimes lifestyle adjustments. While it may seem daunting, with a well-structured plan and determination, it's entirely possible to become debt-free.

Personally, it took me two years to clear my debt and a lot of sacrifice from my family. My wife had to rejoin the workforce and as a family, we tightened our belts, making sure clearing our debt was the first priority. 

There are two main methods you can use to approach debt management – the Avalanche Debt Repayment Method and the Debt Snowball Method. You can find out more about these methods through this article

#5 Watch Out For Buy Now, Pay Later Apps (BNPL)

With the rise of buy now, pay later (BNPL) apps like Atome, Grab PayLater, and SPayLater, getting your hands on a high-ticket item is easier than ever. 

And while these services offer the allure of immediate gratification without the upfront cost, they also come with financial implications that need careful consideration.

So, for 2024, you’ll want to resist the temptation of BNPL and avoid picking up debt, even if it seems like a good deal because at the end of the day, you’ll be hurting your future finances. 

#6 Keep On Investing

Whether you're already an investor or considering beginning next year, your investment journey is a vital component of a comprehensive financial strategy. 

If you’ve already been investing, perhaps 2024 can be the year you learn even more about it. However, if you’re only at the beginning of your journey, a good start is to educate yourself about the basics of investing. This includes understanding different asset classes, risk tolerance, investment horizons, and the concept of diversification.

Here are some articles you can check out to learn more about investing.

#7 Find Your “Why” 

Discovering your "Why" in financial planning is about understanding the deeper motivations and purposes behind your financial decisions

This introspective approach not only offers clarity but also guides your financial behavior towards more meaningful and sustainable choices. And that’s exactly what we want for 2024!

Here’s how you can find your "Why" in various aspects of financial planning:

1. Saving Goals

Ask yourself why you are saving money. Is it for retirement, a child’s education, a major purchase, or just for a sense of security? 

2. Investment Choices

Consider why you've chosen your current investments. Do they align with your risk tolerance, financial goals, and investment horizon? 

3. Spending Patterns

Reflect on your spending habits. Are they driven by needs, wants, or external pressures?

4. Debt Management

Evaluate the reasons behind your debts. Are they a result of necessary expenses, lifestyle choices, or lack of planning?

5. Retirement Planning

If you haven't started planning for retirement, identify the reasons. Is it due to a lack of resources, understanding, or prioritization?

6. Emergency Fund Level

Assess whether your emergency fund is sufficient for unexpected situations. Is it enough to cover at least 3-6 months of expenses?

7. Insurance Coverage

Review your current insurance policies. Do they provide adequate coverage for your life circumstances?

8. Financial Prioritization

Analyze why you prioritize certain financial goals over others. Do these priorities reflect your long-term objectives and personal values?

Why It’s Important To Plan Your Financial Resolutions For 2024

Planning your financial resolutions for not only 2024 but every year is important for several reasons, and it can have a profound impact on both your short-term and long-term financial health. 

A well-planned financial strategy helps in building a buffer against unexpected events like job loss, medical emergencies, or economic downturns. This is especially true since the economic landscape is constantly evolving. 

Inflation rates, market trends, and interest rates often change, impacting our purchasing power and investments. Consequently, planning your finances allows you to adapt to these changes proactively, ensuring your financial stability.

And of course, financial stability can directly impact the quality of your life. By planning your finances, you can ensure that you have the means to enjoy your life now while also securing your future.

Subscribe to our financial newsletter for the latest news, insights, and advice on personal finance, investing, and more. With every email, you’ll gather the confidence and knowledge to make informed decisions to achieve your financial goals. 

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