Becoming Financially Fabulous in 2024 with Mary Howard of Morgan Stanley

There is no better time to step into the mindset of “being my own personal CFO”.  Mary Howard of Morgan Stanley in Bozeman, Montana provides a pathway with the good news: Improving your financial well-being might be easier than you think. She suggests six simple steps you can take to help set yourself up for financial success in 2024 and beyond.

1. Revamp Your Budget for 2024
First, start the year by revisiting and fine-tuning your budget. Assess your monthly income, fixed and variable expenses, and set financial priorities. With ongoing inflation, allocate wisely for essentials like groceries and fuel. Also, streamline your subscriptions (streaming, Hello, Crackle & Starz?)—cancel unused or forgotten ones, especially after free trials.

2. Secure Your Emergency Fund
Next, secure your emergency fund safeguards for your financial stability during unexpected life events, like shifts in employment. Aim for three to six months’ worth of living expenses in a secure, liquid account—consider high-yield money markets for potential earnings of 4-5%. Explore options with your bank to maximize returns on your savings.

3. Manage Debt Wisely

Even so, if you’re already adept at handling debt, consider further reduction and consolidation. Use extra income from a raise or year-end bonus to tackle balances with the highest interest rates. Consolidating remaining debt can simplify your financial life, potentially securing a lower interest rate on a single loan and alleviating money stress.

4. Align with Your Goals

Evaluate your goals, whether short-term (like buying a house in 5 years) or long-term (think a comfortable retirement). Check if you’re on track with your savings and investment plan. If recent market changes or other factors have momentarily shifted your trajectory, collaborate with your financial advisor to realign and stay on course. A solid financial plan is paramount.

Or, if you’re still on track with your goals, talk with your financial advisor about new goals you want to work toward. For example, in 2023, were you able to boost your contributions to a workplace retirement plan or individual retirement account? In 2024, can you contribute even more to these or other accounts?  The more you can put away, the closer to “stylish” your retirement will be!

5. Revisit Your Asset Allocation

Think about revisiting your asset allocation, or how your investments are split within your portfolio amongst equities, fixed income and cash. Asset allocation in your portfolio should ideally reflect your various life stages and the saving goals associated with them. For example, as you near retirement, you may consider moving portions of your portfolio into a more conservative asset allocation like fixed income. Or, if recent gains or losses in financial markets have caused your portfolio investments to stray away from your target allocation it may be time to re-balance. Remember, as you near retirement age, you have less of an ability to absorb volatility from the stock market.

6. Refresh Estate and Insurance Plans

Lastly, use the new year as an opportunity to review and update your:

• Estate plan: Prioritize creating or updating essential documents like Last Will and Testament, power of attorney, or health care proxy to ensure your assets are distributed according to your wishes.

• Beneficiaries: Check and update beneficiaries for retirement accounts (e.g., 401(k), IRAs) to reflect any life changes such as marriage or divorce, ensuring that your preferences are current and aligned with your circumstances.

• Life insurance: Assess your life insurance policies to guarantee adequate coverage for your family’s financial needs. If your employer doesn’t provide insurance, consider purchasing your own policy. Optimize existing coverage to safeguard your wealth, livelihood, and loved ones, especially if there have been changes in your net worth or liabilities.

Mary Howard is the First Vice President, Financial Advisor Portfolio Manager for Morgan Stanley Wealth Management and is a Volume 2 Member of The Scout Guide Bozeman/Big Sky. Her offices are located at 2200 West Main Street in Bozeman, Montana 59718.

Direct: +1 406 522-2046 Cell + Text:  +1 406 570-0655