What is Personal Finance Planning?
Personal finance planning is creating a big picture financial plan for yourself. What do you want to accomplish financially this year? Since there are tax incentivized accounts that reset every calendar year, it’s a great time to take advantage of these incentives and contribute as much as possible to these accounts. So, let’s dive into the annual personal finance planning checklist!
This post is about personal finance planning.
Let’s dive into the top 5 Personal Finance Planning Checklist items to include are:
1. Max out HSA/FSA
First things first, your medical savings/spending accounts! Whether you have an HSA which the contribution limit is $4,150, making your bi-weekly contributions $160. Or if you have a FSA, where the contribution limit is $3,200, making your bi-weekly contributions $123. Whichever account you have, make sure to take care of your medical needs!
2. Max out Roth IRA
The Roth IRA contribution limit for 2024 is $7,000 (for those under 50 years old). Make every penny count! This account lets you grow your money tax free with tax-free withdrawals. Could it get any better? So the earlier you start, the better! $7,000 across the year is about $269 every other week. And if after all of the other accounts you’re maxing out, it’s just a tad too much to squeeze, you don’t have to contribute the $7,000. Just do what you can.
3. 401k Contributions
The contribution limit for 2024 is $23,000. Yes, that’s more than any of the other accounts we’ve talked about. However, you don’t have to contribute the max. Do what you can. Is 2% of your paycheck all you can squeeze? Then do that! Remember, these accounts are yours, whether it’s past you, present you, or future you. Future you will be happy you made even the slightest contributions, because the more important aspect is that you keep contributing and investing. For the folks who can do the contribution limit, this means $884 every other week.
4. Create Sinking funds
What are some big events happening this year?
Going on an international trip? Write down how much you want to put away for it. Divide that by however many weeks you have until the trip, and that’ll be how much you’ll need to put away for it every week.
Hosting a wedding? Write down how much your budget is for it and divide it into monthly/bi-weekly contributions.
Paying for home, car, health, dental, vision insurance this year? Tally the total annual cost and divide it into monthly/bi-weekly contributions.
Have any subscriptions? It’s almost always cheaper to pay in full for the year than it is opting for the monthly payment (keep in mind, the retailer may not offer both). There’s Amazon, Costco, Netflix, Hulu, etc. I like to combine my subscription totals for the year and save for it so that next year, I can pay for them in full, every time.
5. Update Bridge Investment Accounts
Trying to retire early or simply have the option to not work? That’s great! But we have to plan for that. How much money is enough money for you to live off of without having to work?
Remember, these are just a few of the tax advantaged accounts that you may be eligible to contribute to. Since everyone’s situation is different, there may be other accounts you’re eligible for that others aren’t. This is just a snapshot of some of the more common accounts. Feel free to adjust this plan to fit your situation!
To reiterate, the top 5 personal finance planning checklist items to include are:
- Max out HSA/FSA
- Max out Roth IRA
- 401k Contributions
- Create sinking funds
- Update Bridge Investment Accounts
There you have it! Interested in learning more about personal finance planning? Check this post out for financial new year resolutions.
Hey!
Interested in seeing more? Check out our Instagram, Pinterest, and Twitter below!
