December is upon us, bringing the festive cheer of the holiday season and the anticipation of a new year. As you gear up for the celebrations, don’t forget to take a moment to review your finances and set the stage for a prosperous 2024.
Here’s a checklist to help you put your financial house in order:
Perform a Comprehensive Financial Review
Budget: Evaluate whether you stayed within your budget this year. It’s an opportune time to scrutinize your income and expenses, making necessary adjustments for the upcoming year. If there are surplus funds in any category, consider allocating them to your emergency fund or investments.
Debts: Check your progress in repaying any outstanding debts. In the coming year, prioritize paying off debts with higher interest rates.
Emergency Fund: Ensure you have sufficient cash reserves to cover 3-6 months’ worth of expenses.
Estate Planning: Review and update your estate plan or will. If you don’t have an estate plan in place, now is an ideal time to create one. Feel free to reach out to me for more information.
Assessing Your Insurance Needs
Have you ensured adequate protection against unforeseen and potentially devastating life events? As your advisor, I want to stress the importance of insurance, whether it’s for life, car, or home.
Consider scheduling a conversation with your advisor to conduct a comprehensive needs analysis. Have there been any major life events, like acquiring a new home or job, or starting a family? If so, it’s probably a good idea to reassess your insurance coverage.
Maximize the Potential of Your Registered Accounts and Contributions
TFSA/RRSP
If there’s still available room in your TFSA/RRSP, think about making contributions to benefit from tax-free growth and potential tax credits.
TFSA limit The 2024 tax-free savings account dollar limit will increase to $7,000 (up from $6,500). For someone who has never contributed to a TFSA, and has been a resident of Canada and at least 18 years of age since 2009, the cumulative TFSA limit will be $95,000 in 2024.
RRSP limit: The registered retirement savings plan dollar limit for 2024 is $31,560, up from $30,780 in 2023. Of course, the amount you can contribute to your RRSP in 2024 is limited to 18 per cent of your 2023 earned income, which includes (self-)employment and rental income, up to the RRSP dollar limit of $31,560, plus any unused RRSP contribution room from 2023, subject to any pension adjustments.
Boost RESP Contributions
It’s wise to make the most of your RESP grants. If there’s room to spare, consider making additional contributions. After all, you’re saving for your children’s future.
Prepare for Tax Season
Unless you are self-employed, you must file your 2023 income tax return by the end of April 2024. Start gathering the documentation you need at tax time to ensure you don’t miss out on important tax deductions and credits.
Plan for the Future
Maybe you had some shortcomings this year. You can avoid the same problems in the coming year by planning well ahead.
Take a look at your budget to determine if you need to tweak it to accommodate your new financial goals. Do the same for your insurance and estate plan.
Feeling uncertain about where to begin?
If you’re facing challenges with your finances or finding it difficult to outline and reach your goals, I’m here to assist you.
Referral
Your recommendation to family, friends, and co-workers is one of the highest compliments I can receive. If you were pleased with my service, please feel free to refer.
