4 Money Moves to Make in 2024

With the looming recession and economic uncertainty, it’s more important than ever to make the most of your money. Check out these money moves to make in 2024 to optimize your financial success.

1. Build an emergency fund

Expect the unexpected. You never know when you may need extra cash on hand.

Whether something breaks down or you are laid off from work, these unexpected expenses could put you and your family in a bind. The best way to avoid this is to boost your savings, particularly in a high-yield savings account, so you can build an emergency fund. It’s even better if you automate it! Just take a percentage of your check every month and have deposited it into a savings account that you won’t touch. Then watch your savings grow!

Your emergency fund should cover about 3-6 months of necessary expenses, such as rent/mortgage, food, gas, and utilities. Having an emergency fund makes hard times just a little bit easier.

2. Pay down debt

Got debt? Make a plan to pay it off. The best way to do this is by determining what debt has the highest interest rate; this will likely be a credit card. From there, pay more on that debt while paying the minimum on your other debt. Once you’ve paid that highest-interest debt off, you can put the amount you were paying towards the next highest-interest debt you have. This will create an avalanche effect.

For example, Suzy has three credit cards with balances:

  • $5,450 at 9%
  • $7,200 at 12%
  • $3,950 at 11%

Suzy should start paying down the $7,200 since it has a higher interest rate. If she pays more than the minimum, she’ll pay it off faster, so it’ll accumulate less interest. This will save her money in the long run. Once she pays off that credit card, she should add the amount she was paying for the 12% interest credit card to the 11% interest credit card. Until this point, Suzy had been paying the minimum on the 11% interest credit card, but now she has the extra money to put even more money toward her debt.

Another way to pay down your high-interest debt is to complete a balance transfer. This is when you transfer the balances from multiple credit cards/loans onto one credit card. Many financial institutions will offer a 0% introductory rate for your first year. This is perfect to pay off a lot of debt without accumulating interest. It also provides the opportunity to have your debt all in one place, making it easier to manage. Learn more about balance transfers.

3. Optimize your retirement savings

Have you started thinking about your retirement? It’s never too early to start contributing to a 401(k) or an IRA. In fact, the earlier the better! A 401(k) is an employer-sponsored benefit that maximizes your retirement savings. If your employer offers a 401(k), we recommend contributing enough to at least reach the company’s match. For example, if Mike’s employer offers a 4% match, Mike should try to contribute at least 4% of his paycheck, so he can qualify for the match. That’s 8% going into his retirement, and he didn’t have to use his own money for half of it! If you already contribute to a 401(k), reevaluate it. Consider boosting your contributions to save the most for your retirement. Remember: there are 401(k) limitations. This year, the 401(k) contribution limit is $22,500.

In addition, IRAs are another great way to save for retirement. 401(k)s and IRAs share similar traits, except IRAs are retirement savings accounts opened by you. The only person who contributes to this account is you. If your employer doesn’t offer a 401(k), consider opening an IRA to start saving for your retirement. Learn more about 401(k)s.

4. Stay on top of student loans

They’re back. Student loans have been in forbearance since 2020, leaving a large gap of time since borrowers had to make a payment. A lot can happen in four years, so it’s time to review the budget. Payments resumed in October 2023. Most student loan borrowers were paying $200-$300 a month, so ensure you still have money available to pay for your student loans. While not paying your student loans won’t hurt your credit score, interest is accruing on the amount owed. If you’ve taken student loans out of your monthly budget, start looking for ways to cut expenses to have the money to pay off your student debt.