Five Simple Moves You Can Make to Give Your Finances a Fresh Start for 2024
Ah the new year! It’s that time of year when people find some extra motivation, “oomph”, grit, or whatever you want to call it to at least start a new routine when it comes to nutrition, exercise, money, and organization. On that last one, organization, I don’t know about you but I can only handle about 3 days of the house being a disaster after the Christmas chaos and then I feel this overwhelming urge to organize and declutter my home. I am really excited about my plan to put on my sneakers and a good podcast and get to work around the house later on this evening! On nutrition and exercise, on the other hand, I have struggled this year to stay motivated to exercise and stick to a routine. Ask me in a year how its all going (or maybe don’t lol).
When it comes to money, though, I do have a few things to say! During this past month I’ve been doing a lot of thinking about the things I’ve learned after being a money coach over the past year and have assembled a list of adjustments or simple moves that you can make to give your finances a fresh start for the new year. None of these things are transformative in their own right but they can make a big difference in how you feel overall about your money. And some of them with save you a few bucks! Let’s get started.
Move 1: Reduce the number of bank accounts you have
There is NO NEED to have more than a one checking account (where your pay is deposited and from where you pay your bills) and one savings account (where you are stashing extra cash beyond what you’ll need for the month in order to take advantage of a higher interest rate). If you share some finances with a partner but aren’t totally combined, an ideal set up would be to each have your own checking and savings accounts and then to have a joint checking account and a joint savings account. That’s it. Close the rest! You may be saving for multiple goals at the same time like your kids’ annual summer camp fees ($$), Christmas, a trip etc.. This is common and not a problem - just find a way to track the progress towards these goals elsewhere. Being a YNAB coach I recommend YNAB (of course!) but this is possible with any other zero-based budgeting tool or a simple spreadsheet.
Move 2: Automate your finances
Automating your finances is an amazing way to make sure that 1) you are meeting your longer-term goals, 2) you don’t miss anything like a bill payment, and 3) you’re not spending all of your free time in your banking app. It took me a little while to be comfortable with this level of automation but it truly is a game changer and things are running like clockwork now.
I currently have the following automations set up:
I have monthly transfers set up to my kids’ RESP account as well as my RRSP account (for my American friends, these are investment accounts). Some of my clients set up these transfers to happen on pay day … and they make sure to pay themselves first!
All of my bills are on autopay. Some are paid by credit card and some are paid from my checking account.
I have an automated weekly transfer to my kids’ bank accounts for their allowances. I set this up from the beginning as I never have cash and I would probably forget to do it manually.
I have an automated a monthly transfer to the account I share with my husband. Easy peasy.
My personal credit card, business credit card, and our shared credit card are set up on auto pay. This one took me awhile to get comfortable with as these amounts can be high but it feels so good to be able to do this. I would say this is an advanced move. You need have very good control of your spending and be a “credit card person”. In YNAB, I keep an eye on the future running balance of my checking account and the “Available” column for the credit cards.
Move 3: Open a high yield savings account.
There are many high yield savings accounts out there in both Canada and the United States offering 4% interest or better. On a $10,000 balance this is an extra $33 a month for just sitting there - truly the definition of making a passive income! These accounts are easy to find online and only take a few minutes to open. They are the perfect place to stash your emergency fund or any cash beyond what you’ll need for the month. Do your research and find an account where the rate isn’t just a for a limited promotional period and where transfers to or from your checking account are free.
Move 4: Cut down on your subscriptions.
This one was eye opening to me as a money coach as I have never really been an over-subscriber to things. I worked with clients who were paying for subscriptions they weren’t using, didn’t know what subscriptions they had, or were paying for more than one subscription to the exact same service. I suggest going through your last six months of banking statements and making a simple list of your subscriptions with the name, date it is being charged, and amount. Don’t forget about your yearly subscriptions. You will quickly see how these subscriptions can add up. Make it a game to start cancelling the ones you don’t need. It might be as easy as a few clicks on your phone or you may have to suffer through a company’s elevator music whilst on hold.. but it will be worth it.
Move 5: Make a List of Your True Expenses for 2024 (and save for them).
Your “true expenses” are those predictable and unpredictable expenses that are not part of your regular monthly expenses or bills. They can be bills (like an annual or semi-annual property tax bill, an annual subscription, or your annual credit card fee), seasonal expenses (like Christmas gifts, birthday parties, registration fees), or unpredictable expenses like a car repair or medical expense. Just being aware of these will hopefully spark a bit of that “oomph” to start setting money aside for these every month in your budget. Imagine how you will feel to have Christmas 2024 full funded just in time for the November deals!
Conclusion
A fresh start for the year ahead might be just what your finances need. But these simple yet impactful moves aren't just about saving a few bucks; they're about gaining control and peace of mind. Small changes can make a big difference. Here's to a prosperous year ahead!
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