3 smart financial moves you can make before the end of the year
With only a couple of months left in the year, now is the time to start preparing a strong financial foundation for 2024. After all, the moves you make now can make next year easier or harder to get through from a financial standpoint.
So, what can you do to set the stage for a financially sound 2024? There are a few things you can do to make 2024 as fiscally stable as possible.
Lock in today's high interest rates with a CD now.
3 smart financial moves you can make before the end of the year
Here are three actions you can take right now to set the pace for your financial stability in the year ahead:
Open a high-yield savings account
One thing you can do to make life more comfortable is to focus on savings by taking advantage of today's high interest rate environment with a high-yield savings account.
"In the shorter duration and recently, I am a very big proponent of high-yielding savings accounts," says John Jones, investment advisor representative at Heritage Financial in Newberry, Florida. "For the longest time, rates on high-yield savings accounts and money market mutual funds were not worth the hassle of considering, but now due to our current rising rate environment, these yields have been increasingly competitive."
"All investors should keep a certain portion of their portfolio liquid for an emergency fund, pre-planned life expenses or even unplanned life expenses," says Jones. "A high-yielding savings account is a great way to keep funds liquid but also working for the investor."
Find out about today's top high-yield savings accounts here.
Open a CD
High-yield savings accounts aren't the only way to use today's high interest rates to your advantage. You could also open a certificate of deposit (CD). These investment vehicles are FDIC-insured, making them a safe place to store your idle cash. But the biggest reason to open a CD is to take advantage of high and stable returns.
The Federal Reserve has increased rates 11 times over the last 18 months, which has led to higher APYs on CDs. And if you open a CD now, you won't have to accept a lower APY when the rates cool off. That's because CDs give you a way to lock in a rate for the full CD term, regardless of what happens with the overall rate environment.
Tap into your home's equity
Now may be a great time to tap into your home's equity. That's especially true if you have credit card debt. "Consider opening or tapping into a home equity loan/line of credit if you have significant credit card or other unsecured debt," says Brian Martin, wealth manager at Merit Financial Advisors. "That bad debt will no doubt carry the highest interest rate of all your borrowing."
"Utilizing the equity in your home to consolidate that debt will tend to carry a lower interest expense because the debt is backed by the home. This effectively turns the bad high-interest debt into better lower-interest debt," Martin says.
Learn more about your home equity loan options here.
The bottom line
The new year is approaching quickly, and you may be able to make the year a more promising one by taking small financial steps today. Consider opening a high-yield savings account or CD, or using your home's equity to pay off high-interest debt today, setting the stage for a better tomorrow.
