3 Best Financial Decisions for New Year 2024

The month that is the shortest of the year has arrived, and with it a shorter but no less significant list of financial tasks. The beginning of February is a great time to review and renew your commitment to any financial goals you set for yourself at the beginning of the year, even if you may have lost some of your motivation to save more or spend less. After that, focus on taxes, making the most of high-interest rates, and having financial conversations with your spouse. We can’t assist you with Valentine’s Day (or Palentine’s Day) planning, but we can guide you through this month’s financial checklist.

Here’s how to maximize the next 29 days of your life.

1. Discuss money matters with your partner

Though it may seem like a recipe for disaster when it comes to romance, bear with us: Studies reveal that romantic partners tend to overestimate the negative emotions they will feel during financial conversations, while also underestimating the importance of having these conversations. A 2023 study from Bread Financial revealed that 55% of singles find it attractive when a potential partner is financially responsible, so you might want to pay attention even if you don’t have a special someone in your life.

Relationship problems involving money arise more often than you might think. Does one person usually pay the entire bill when you go out, or do you split it? Do you have retirement and home ownership as parallel objectives? Have you guys even talked about it?

Speaking about money is frowned upon, particularly in relationships where power disparities and gender norms can subtly affect how partners divide financial responsibilities. That being said, nobody usually benefits from keeping quiet about important issues. When you’re married or locked into a lease, the last thing you want to discover is that your partner has a problem with excessive credit card use. Both spouses’ credit scores may be impacted by any debt you or your spouse take on after getting married, such as a mortgage or auto loan.

To be clear, we are not advocating that you confront your partner about their amount of student loans or whether they have inherited anything. Select a time when you both feel comfortable having an open and sincere discussion about your financial circumstances. Then, gently bring up the topic. To be honest, you should be ready to discuss your debt, spending habits—including negative ones—and future goals. Putting all of your cards on the table can promote positive communication and mutual understanding, but it doesn’t mean you have to decide everything at once.

Do you need more inspiration? Sharing financial information openly with your partner has been shown to be beneficial. An Indiana University Kelley School of Business study from last year found that engaged and newlywed couples with joint bank accounts had significantly higher relationship quality than those who keep their money separate. Couples who merged their accounts experienced improved financial harmony and expressed greater satisfaction with their shared money management and discussion.

The study’s lead author, Jenny Olson, stated in a news release, “They frequently told us they felt more like they were ‘in this together’.”

2. Buy a CD before rates go down

High APYs on savings products like certificates of deposit (CDs) have been one benefit of the Federal Reserve’s inflation-busting interest rate hikes, but there isn’t much time left to take advantage of those favorable rates.

Some significant online banks have already begun to reduce the rates on 12-month certificates of deposit (CDs) in anticipation of the central bank’s planned rate reduction later this year. For example, Barclays’ 12-month CD is now 5.3% instead of 5.5% as it was last month; in recent weeks, Discover, Marcus, Sallie Mae, and Synchrony have also reduced theirs.

It’s safe to assume that CD rates won’t rise above their current levels in 2024, even though no one knows with certainty when or how much they will decline. Since these accounts lock up money for a predetermined period of time, they are not suitable for everyone. But if you’ve been considering taking advantage of the current rates, consider this your green light to purchase them right away. One method for doing so while maintaining liquid savings is CD laddering.

3. Begin preparing your 1040.

Prepare your tax return now to help yourself and get rid of one of the most annoying yearly financial tasks. When you receive your refund ahead of everyone else who files at the last minute, you’ll thank yourself afterward. This year’s deadline for filing is April 15.

Now that tax season has formally begun, the IRS began accepting returns on January 29. Most of your tax documents ought to have arrived by now; if not, you should inquire with your employer about the whereabouts of your W-2.

A few changes could cause your file to appear slightly different this year: In 2023, the IRS extended Free File to include taxpayers with an adjusted gross income (AGI) of $79,000 or less, a $6,000 increase over the previous tax year. The agency’s new Direct File pilot program, which will be phased in as it goes through final testing, will also allow qualified taxpayers in a few states to file.

Only individual federal tax returns will be accepted at first by the program. The Direct File will direct you to a state-sponsored platform if you need to file a state return after completing your federal one.