(In Northern CA, we have to savor fall and the Holidays at the same time, our peak colors occurred between Thanksgiving and Christmas this year!..not when this picture was taken)
Happy New Year 2024!
I'm sure no one has really wished you that in the last few days, as we are almost done with the most dismal month of the year, SADuary. I know people say it's the first month of the new year, new beginnings, etc.
However, the way I look at it is the holidays are over, the days are still short, and the cold gloomy weather is just stretching its legs.
Anyway, want to know a silver lining for January? Since the holidays are over, the weather is cold, and maybe you spent too much, it could be a great time to settle into a coffee shop for a few hours and get your finances in check.
What are the Top 3 things you should do for your finances each year?
Review and rebalance your investments
Audit your spending and your budget going into the new year
Update your goals and assess your progress to ongoing ones.
Keep in mind, that contribution limits to your investments increase in 2024, with 401(k) limits increasing to $23,000 and IRA contributions to $7,000, before catch-up provisions.
While this list is just a start, it's important to keep in mind that priorities are different for everyone. For example, if you are a renter or homeowner, or a parent, or a student, your financial goals likely won't be the same.
However, almost everyone can benefit from reviewing their cash flow, rebalancing their investments making sure they still align with their goals, and revisiting their own specific goals.
So, is 2023 going to be like 2024? Or will housing prices crash?
It seems as with each passing year since the pandemic, zealous renters are hoping for news that the housing market will crash and they can finally enter the market.
And who can blame them, housing has been on a tear since 2020, when prices were already high and outbidding was prevalent.
Isn't funny though, how so many people think the housing market is down right now? DOWN. I've seen articles that we are in a buyer's market. Yes, even though prices have increased over 40% in just a year in some places, we are in a buyer's market because there's less competition now.
Sure, I'd happily pay $800,000 for a 3bd/2ba built in 1990!
Now inflation is another story, on top of more layoffs we are seeing even into 2024.
Most, if not all of us, buy groceries, gas, and household supplies. Even if you're like me and eschew driving as much as possible, gas prices will have an effect on you.
Or maybe they have a landscaping company and have to drive a heavy truck and operate gas-powered equipment. People can't stop buying daily necessities just because they cost more, such as medicine, utilities, and laundry detergent.
Gold Coast = Need to have Gold to Survive?
Now our state government is looking at ways to pay people to offset the high cost, and everyone with a microphone is complaining, even giving calling it "Biden Inflation". Inflation news is all the rage.
But guess what? The roads are still just as crowded, and people are admitting to not scaling back their driving. Some driving is necessary, sure, especially if you can't work from home.
However, take a look at the local mall, restaurants, parks, trails, and anything else recreation-related, and the parking lots are packed! What gives? Someone, please enlighten me.
Now because of inflation and gas prices becoming a fixture in everyday lives, people are wondering "Is a recession coming?" Well, why would one think that? Basic economics my friend. If things are costing more, people tend to scale back their spending.
What you can do though, is prepare. With this recession news coming on the heels of "The Great Resignation", many are still looking to jump ship while the odds are in the employee's favor. Even if you're not considering quitting, you might be at a risk for layoff.
So what should you do?
1) Audit Your Spending - Sure when you're raking in $6,000 per month you don't feel the urge to monitor your credit card statements or be frugal about online shopping. However, that money may not last forever, and you don't want to be stuck with high credit card bills.
Especially with concerns around inflation and recession at the same time. Being out of work AND having your rent go up by $350 a month? Ouch. Look at where you would cut back if you had to go on unemployment or a lower-paying job.
Start winding down subscriptions and spending you can live without. Calculate your nonnegotiables like rent, food, and car payments, and determine how much you NEED per month, versus what you're currently spending.
2) Build Up Your Emergency Fund - If you've been living like there's no tomorrow and racking up debt, you might be in for a rude awakening.
When a recession shows up and puts you out of work, how are you going to pay the bills and keep a roof over your head? Don't tell me inflation is causing you to not have savings, especially if you're one of those people complaining about gas prices while filling up your 2024 Tacoma on your way to the lake.
3) Start Testing some Side Hustle Ideas - Most of you, my lovely readers, are familiar with a few of my side hustles (I like to call them extra income outlets, "hustles" just don't sit well right now). If you don't find you have time, fear not.
The housing market may slow down, but no one knows. Maybe you can rent an extra room, or your garage, or even your pool. You can also try working a fun job on the. weekends, like doing home staging, painting fences, or bartending. With sites like Upwork, Fiverr, and TaskRabbit, there are many easy ways to find something you like to do while padding your savings a bit.
4) Nurture Relationships with Stable Companies - Been ignoring those LinkedIn emails from Recruiters? You know who you are. Rather than ghosting because you're too cool to respond, try to politely decline but offer to stay in touch.
You never know when you might need them, or they can connect you to their network. An economic recession hits various industries differently. If you work for a hotel, can your skills translate into an apartment community? If you work for a marketing agency, are there roles you can fit into within a school district or government agency?
Think about how your skills can transfer to a recession-proof industry, like healthcare, government, food, agriculture, or education.
So there you have it. Prepare yourself for the worst, and if it doesn't happen, you still win! You'll be in a much more stable financial position, whatever inflation or recession comes your way.
2024 is a toss-up, however, I'm an optimist and I firmly believe the tides will change this year, and millennials will finally catch a break.
Comments