24 Things You Need to Do With Your Money in 2024 Part 2

Transcript:

24 things you need to do with your money in 2024, part two.

What's up everybody. And welcome to the personal finance podcast. I'm your host, Andrew founder of master money. co. And today on the personal finance podcast, we're going to be going through part two of 24 things that you need to do with your money in 2024. If you guys have any. Questions, make sure to hit us up on Instagram, Tik TOK, Twitter at master money co and follow us on Spotify, Apple podcasts, or whatever podcast player.

You love listening to this podcast on it. If you want to help out the show, consider leaving a five star rating and review on Apple podcasts, Spotify, or your favorite podcast player. Can I thank you guys enough for leaving those five star ratings and reviews. They truly mean. The world to us. Now we're going to go through part two of the 24 things you need to do with your money in 2024.

And if you miss part one, we went through the first 12 in this series and it was an action packed episode for sure. So make sure you listen to that episode first before diving into this one, because this one is going to build off of the first episode. So make sure that you check that one out and we're going to dive right in here as we go through this.

So I am not even going to go through the explanation. I did that in the first episode. So we are just going to go diving right into this, uh, to number 13. So number 13 is to reduce expenses that you do not value. Now, when it comes to reducing expenses, we have a very strategic way on how to do this. So you need to learn how to reduce expenses based on human psychology.

Instead of just going out there and just ripping the bandaid off and reducing expenses. All at one time. So what I truly believe is that most people need to a figure out what they truly value and you need to figure out what expenses you actually value. Then you need to reduce those expenses or remove those expenses that do not bring you joy and, or do not bring you value.

And, or if you're at the beginning, those expenses that you cannot afford. So all of this is really, really important to do overall. But when you reduce expenses, this is not something where you're just going to go out there and you're going to say, Hey, I spend 800 per month on food. Now I want to spend 200 per month on food.

So I am going to reduce my food bill by 600 per month right away. This is not something that I recommend anybody do. Why? Because what's going to happen is you're going to drop down to 200 per month on food from 800. And then you are not going to stick to that. It takes a very specific disciplined person to be able to stick to that.

We want to create goals for ourselves and we want to create systems for ourselves that allow us to actually achieve these goals that we are trying to set out and achieve. So here is the difference on how. I would handle this and why I would only pick two specific big areas that I want to reduce my spending in.

And in the future, we'll do an episode on the order of operations of how to reduce your spending, because it is going to be like an entire explanation of an episode on how to do this. But overall, this is going to be a very simplistic way of how you can do this right now and take action today, because you know, you have some spending out there that you most likely want to reduce.

And if that is the case, then reducing expenses gradually over time is going to be more important. So pick two of them this year. And for the first six months, I want you to try out this one first and see what it is. So for a lot of people, it's going to be groceries, or it's going to be something surrounding food.

I've talked to so many different people about their finances. And a lot of times it is something surrounding food is what they know. They immediately want to cut back. And so if you're at that 800 per month in food, you want to reduce it down to 200. Maybe you're a single person. You don't really need to spend that much money.

Then maybe you want to reduce it down to 200 bucks. And so if that is something you want to do, this is just a hypothetical example. Then what you would do is in month one. You would reduce it down to $700, so you'd go down a hundred dollars from 800 to $700. In month two, you'd reduce it down to $600. In month three, maybe you had a Super Bowl party and you had some friends over, or you had a couple of extra things that came up, and so it bounces back up to $700 in month three.

Hey, we all make mistakes. This is going to happen. And I wanted to put this in the example because I. Think you need to learn how to roll with the punches, meaning that life's going to happen. If you make a mistake, you just take it and move on to the next month. So in the next month, for example, now you're reducing it down to maybe 500 bucks per month.

And then eventually in month six, you're going to three 50. And then a month. Seven, maybe something around those lines. Then you're down to 200 per month. Now, this is how you do it. You do it gradually month over month. So that it is not so drastic when you first rip off that bandaid to reduce your spending.

So the same thing goes for any spending category you have, but here's the goal. Pick two of them this year, reduce two of those expenses. Gradually over time, you could do them both at once. If you want to do them slowly and or you could do one the first six months, one, the second six months, this is going to lead to success specifically when it comes to human psychology on a reduction of expenses.

Now, at the same time, one thing I want you to think about doing. Is I want you to think about doing what I call a lifestyle creep assessment. Now, if you don't know what lifestyle creep is, it is when you start to get a raise or you get paid more money and you increase the amount of income that is coming into your household.

But at the same time, when you do something like that, you also increase your expenses. So maybe you get. A 10, 000 raise. All of a sudden you're looking at your old clunker and sitting in the driveway and you're saying, man, I could afford new car payments. So I'm going to increase my lifestyle expenses by going out and buying a new car and increasing those payments.

Then you get another raise the next year. And you're saying, man, I can afford a bigger house. So I'm going to go out and buy a bigger house. Then your expenses increase with that. Then you get another raise the next year. And then you say, man, I can spend way more money going out to eat. And then those expenses start to increase.

This is what lifestyle inflation is. Now, let me say something up front here. I do not think lifestyle inflation is a bad thing. In fact, I think you should have a certain percentage of your income coming in, increase your lifestyle inflation. Why do I think that? Because this is going to increase your joy and your happiness surrounding money and your overall fulfillment of life.

Especially if you are starting off from the bottom. If you're starting off from the bottom, the only thing that can happen when you increase your income is your lifestyle is going to creep up and it's going to increase. So some lifestyle creep is actually healthy. In my opinion, if you make 20, 000 per year and you keep it at 20, 000 per year and your income keeps rising and you're just saving and hoarding all that cash, then maybe you're trying to retire really fast.

But if you have no intention of retiring very quickly and you're just doing that, then overall, maybe you want to enjoy a life a little more to each his own. But at the same time, Some lifestyle creep is going to be okay, but for most people, they have too much lifestyle creep, meaning that their lifestyle is staying the same as their income as their income rises, then their lifestyle rises to the level of income, and then their income rises some more than their lifestyle rises to that next level.

And what happens is. They have no gap left. What is the gap? It's the difference between your income and your expenses. And the gap is where wealth is built. So you want that gap to grow over time as your income increases. So your income rises, then your expenses rise slightly. Then your income rises and your expenses rise.

Slightly more, a small percentage of that total income increase. This is how you build wealth. This is how you get more dollars into those investment accounts. So that over time you can have that financial freedom and financial freedom is the goal for most of us here. And most of you listening to this podcast, your goal is financial freedom.

You want to be free to do whatever you want in life. So making sure you do a lifestyle creep assessment is going to be something I would definitely recommend now. If you've been budgeting for a long time and something like a budgeting app, for example, this is going to be really easy to do. You just go back and look at the last couple of years.

How much were you spending each and every single year? I go back to my first budget that I had back in 2014 and I go back and look at how much I spent and I spent significantly less than what I spend now. Now I made less money. There's a lot of different things going on. Uh, I did not have kids. So.

Lifestyle creep is normal. Your boy has a ton of lifestyle creep. Everybody's got it, but you want to do this assessment. So you can go back to your budgeting apps, look at that stuff. If not, you can go back and look at past bank statements. If you have old bank statements, just add it all up. You can get an Excel file, download a CSV file download of each and every single year, you can just do those date ranges, and then you can total the amount that you spent for that year inside of those accounts.

So there's a number of different ways that you can go out and do this. Uh, but you just want to make sure, Hey, are my savings and investments growing? And is my spending also growing in a healthy way? Is it a healthy way or is that the same exact level as my income and my savings really aren't growing much?

And if they are, it's a small percentage. And am I on track for retirement? These are the questions that you have to ask yourself when you do these lifestyle creep assessments. So really, really important to kind of go through this and just know what's going on when it comes to increasing your expenses.

People who fail with money do not have any plans whatsoever. And if you don't have a plan to make sure that this stuff isn't getting out of control, you will never have full control over your money. Number 15. And this is one of my favorite ones to talk about on here is to increase spending on things that you love on the last two.

We just talked about things on how to cut back and look at your lifestyle creep and what you need to do in order to protect your wealth, uh, from your spending, getting too out of control. But once you start to cut back on this stuff, guess what you get to do with those dollars, you get to allocate those dollars towards the things that.

You love. This is the joy of money. This is the joy of building wealth is that you're cutting back on the crap that you do not care about. You're taking those extra dollars and you're putting them towards something. What I don't want to happen here is that you reduce your expenses. All of a sudden that money just commingles in your checking account and you just blow it on something else you could care less about.

I want you to be intentional with your money and intentionality with your money means that you take those extra dollars. You pay. Put them towards the things that you absolutely love. So let's get intentional with our money and increase spending on things that we love. So say, for example, you cut back expenses on a number of different places.

So I just did this as of recently, I do this every single year. I look at my expenses and I say, is there places I don't really want to be spending this money on and it's just getting thrown away and there was, and so I cut back in a couple of different areas. Then what I said was, what is this dollar amount that I just cut back?

What is the total amount? And it turned out that the stuff that I cut back was. Hundreds and hundreds of dollars per month, which is fantastic overall, because now I can take hundreds and hundreds of dollars per month and I can put it towards the things that I love. So one big thing that I'm doing this year is I'm beefing up my emergency fund even more.

I'm actually going to beef up my emergency fund enough to where it kind of makes me slightly uncomfortable. And the reason for that is there's, I like to have cash on hand and additional cash on hand for me is just pure security. Some of you may be saying, I only want three to six months of emergency fund, and you're fine with that.

I'm getting towards the point now where forever I've had a six month emergency fund, and now I want a one year emergency fund. I'm going to stretch it out even more beef up that emergency fund. And that is one of my big goals. So I'm taking these extra dollars and I'm. Automating them straight into my emergency fund, because if I just allowed it to sit and checking and commingle inside of checking, I'm going to blow that money on something else.

Your boy's going to buy way too many golf or pickleball accessories or random Lululemon t shirts or whatever else I buy on a day to day basis. So overall, instead, I'm going to take those dollars and put them towards that emergency fund to cash that up. So that's one of my big financial goals for next year is to beef that bad boy up way, way more.

And the reason for that, like I said, it's just additional security. There's a lot of things that I'm going to be doing coming up in the future here. And so when it comes to that, I would need that emergency fund beefed up for my own mental sanity and all those different things. So really, really big thing that I want to do now, that's just one example of how to do that.

Say you reduce expenses and you want to put it towards your investment or say you reduce your expenses and you're already hitting those investment goals. You want to put it towards vacation and you want to take way more vacations this year. I love that for you. I love that for you to be able to take more vacations, or maybe you want to take those extra dollars and you want to put them towards some of your hobbies.

And you want to spend more time doing things based on your hobbies, or you want to put them towards really big, fun date nights or big, fun times to have with your family. Or you want to put it towards, you know, getting fancy watches. Maybe you're into fancy watches or you want to do more workout classes and you want to spend the dollars on that.

What do you value? Think about what you value, take those dollars and make it rain on what you value when you cut back expenses. And a lot of people, their big value is freedom. So your big value is freedom. You put them in investment accounts. You invest those dollars so you can get freedom or you put them towards rental properties or whatever else you want to do when it comes to that.

Number 16 is make a will if you have not yet and or if you had made a will, make sure you update it based on whatever happened in the past year. So this is something that is on my list as well is to update and adjust my will. We bought a business, for example, that needs to go into the will. Uh, we have some adjustments based on some big financial moves that we have made over the course of the last year.

And so I need to make those adjustments inside of our will and inside of our entire state plan. So. This is one thing. If you already have an estate plan, we have an entire episode talking through how to do this. Trust and will is like the easiest place to do it overall. And so if you have that estate plan in place, then just making sure that you think through all the things that could have happened, maybe there's changes in family dynamics.

If you did, you have children this year, or if you did, then you need to update that will make sure you have that all in place. Were there any changes in your assets? Meaning, did you buy a business? Did you open a new brokerage account? Or did you open a new Roth IRA or a new 401k stick that in your will as well.

Did you get married this year? You need to change your beneficiaries on all of your different accounts. If you did get married so that all of your assets go to the correct people. Uh, were there any changes in trustees or executors of your estate or your will, making sure you think through that, do you have new intentions to give more money?

If you do have more intentions to give more money, make sure you're including that kind of stuff in your will, if anything ever happened to you. So. Those are just some things to think through and make sure that you understand overall. Cause there's a lot of cool things that you could be doing with your will.

And so just making sure you update that every year. This is a great time of year to be doing that. All right. Number 17 is I want you to automate one savings goal. Now, when it comes to savings goals, these are things like. Your car payment, your down payment on a house fund, your fund to fund a wedding, your fund for those huge vacations that you want to go take your fund for buying a business, your fund for buying a rental property, all of these big, audacious, short term savings goals.

All of these goals I think should be automated every single month. And so overall. Pick one and start automating it. Now, how do you do that? How do you automate one of your savings goals? Well, a, one of the things that you can do is if you have a high yield savings account, you can take money when it hits your checking account and you're going to line it up on the same day that money hits your checking account, maybe a couple of days after, and you're going to take that money and it's going to automate directly into your savings account.

This means you're not lifting a finger. Ever. And instead that money is just going directly where you want it to go. Now, if you have a high yield savings account, like ally, for example, you can actually budget inside of there. And so when that money goes in there, you can say, Hey, this is for my wedding fund and every month, boom, it's going to go into your wedding fund inside of your savings account.

So really, really cool, powerful thing to do. I want you to choose one this year. If you don't automate your money. Choose one of those savings goals and make sure you do that. I want you to automate one piece of every area of your income over the course of the next year. But I also want you today, I want you to do this today is automate one savings goal and make sure that you are doing that.

Number 18 is update your Roth IRA contributions. If that's something that you're looking at doing for the next year. So the max for the Roth IRA in 2024 is 7, 000. Really, really important to do that. If you're over the age of 50, you still have that 1, 000 catch up contribution. So when it comes to that ketchup contribution, that means you have 8, 000 that you could put into that Roth IRA if you're over the age of 50.

So making sure you're thinking through this and updating those Roth contributions is going to be really important. Now the income limits have been adjusted over the course of the last year. So for single filers, um, to be eligible for full contributions is 000 made per year and partial contributions are allowed.

Between 146, 000 and 161, 000 per year. Now, if you make too much for the Roth IRA, we have a ton of episodes talking about the backdoor Roth IRA. I had somebody send me an email, say, stop talking about the backdoor Roth IRA, but a lot of people don't know it exists. And so overall, this is what I do every year is I do a backdoor Roth IRA.

So making sure you do that as well, uh, is very, very important. Now for married couples, the, uh, contribution limit has increased to 200. 30, 000 and partial contributions are allowed, uh, between 230, 000 and 240, 000 for married filing jointly. And then no contributions are allowed past 240, 000 of income per year.

So you have to do a backdoor if you did that. So making sure you understand this stuff, you know, some of these updates with the Roth IRA is going to be really, really important overall. And if you make more than that, then it's time to set up the back to a Roth IRA, open that traditional IRA, and then every year, you know, whenever you're going to contribute to your Roth.

You contribute to the traditional and then you transfer it over to the Roth IRA that way. That's how you do the backdoor Roth IRA. And so making sure you do that. I like to do it at the beginning of the year. I like to just front load the whole thing. If you can't do that, or if you're just not willing to do that and you like to do dollar cost averaging over the months, uh, that's great as well.

So overall, just making sure that you get those contributions in, cause you can't get the years back. You can't get the old years back of these contribution limits. So making sure you get those dollars in there is really, really important. Now, the same thing for the HSA. There has been contribution adjustments.

This is number 19, is making sure you update your HSA as well. So for individuals with a high deductible health plan, the coverage for the annual HSA contribution is $4,150. And for individuals with a family, it is $8,300 per year are what the contribution limits are. And if you're 55 or older, you're allowed to contribute an additional 1, 000 as a catch up contribution.

So age 55 and older is what that one is. So again, you have to have a high deductible health plan. You cannot be enrolled in an FSA or a flexible spending account. So both of those are really important to understand. And the contribution deadline for these for this year is April 15th, 2024. And so making sure you get those contributions.

So if you want to still contribute for 2023, you can do it all the way up until April 15th of 2024. Now, number 20 is the 401k to update yourself on the 401k update, those contributions, if you have not done so already, so the 401k contribution has gone up to 23, 000 per year with the ketchup contributions of.

7, 500 per year, meaning that if you're over the age of 50, you can contribute 30, 500 to your 401k. And then the combined contribution limit, meaning the combined limit for employee and employer contributions in 2024 is 69, 000. So this is another great one just to think through, uh, as we go through this.

And we're going to talk about a couple of other things here as well, when it comes to some of these updates. So. The 401k is a big one to make sure that you are updating overall. As we go through this. Now, number 21 is I want you to focus on and develop one income producing skill if you have not done so in a while, and what are some great income producing skills?

There are a bunch of them out there. We're going to come up with an episode on some of the top ones for this next year. And, but I'm going to give you just a couple of ideas here is first, if you don't know what income producing skill, you want to kind of. Come up with start just reading books, start reading a book every single week.

And that's what I do right now. We're on the, I'm doing a 52 book challenge and I do this every year. Um, but this year I am honestly way ahead on my 52 book challenge. I've been enjoying reading some additional business books that I've had on my list for a long time. Uh, and if you're ever interested in the list of books that I read, by the way, if you join the master money newsletter, we do a book club.

Basically we call it the high performance book club. And in this book club, every single week, I give you the book that I'm reading, or if I'm rereading and I'm, I gave you the book I'm rereading. And so overall, that is going to be the book every week that I am reading. So if you're interested in like learning new books to go out there and read, join the master money newsletter.

It is always linked up in the show notes down below, but if you don't know what income producing skill you want to choose, just start reading through books and they're going to give you a bunch of ideas. And then you're going to figure out one and target. So. Things like maybe you need to get additional certification, for example.

So for a lot of people, you're in fields, maybe you're in nursing or you're in fields where if you get an additional certification, your employer is most likely going to increase your salary or increase your income. So maybe that is what you want to do is go out and get an additional certification because the return on investment makes sense for you to go out and do that.

So that is one option for a lot of people out there. Maybe you want to increase. So sales is something that you do every single day, whether you know it or not, you're always selling yourself and sales is going to really, really help you increase your income over time, especially if you get, it's good at sales.

So there is a ton of great sales books out there. And along those same lines is negotiation. Negotiation is one big one. That I think a lot of people need to be focusing on because if you are a good negotiator, you'll be able to make so much more money. Whether you're negotiating with your boss to get a raise, whether you are negotiating with a property owner to buy a rental property, you may be negotiating with.

A business owner to buy a business. You may be negotiating with someone at the corner store down the street, or you may be negotiating with your three year old to get them to eat their breakfast negotiation is going to be so incredibly powerful for you over time. Um, some great books on that, like never split the difference is my favorite one.

So if you never read that, um, that is definitely one I would check out. Uh, it is definitely worth that. And then marketing. So marketing is another big skill that will increase your income significantly marketing yourself, helping market your company, helping. All these different pieces is going to really, really change your life drastically.

If you can learn how to do that as well. So develop one income producing skill. Make sure you're subscribed to this podcast. We will have that episode come out where I will dive deep into each of these and how you can improve those skills. Uh, because that is what I do every year is I try to pick one to two skills and then really hone in on them and improve them.

And I've seen this just compound over time where it's helped me significantly in my life and day to day, and my income has risen because of it. So making sure that you compound some of this stuff is going to be really, really helpful. Number 22. I want you to commit to this. I want you to think through and commit to taking action.

I want you to take more action this year. Meaning that for a lot of people, one of their biggest problems that they have. Is they think about stuff too much or how many of your friends have the idea for the business that has already been started, but they just never did anything about it. That was my idea before Uber started.

That was my idea before TaskRabbit started. That was my idea before DoorDash started. And so, you I have a million idea people all around me. I have a lack of people who are willing to take action. And taking action is how things in life get done. You could read 52 books per year, but if you take zero action on any of those books, you are going to get nowhere in life if you're not taking action.

And I'm saying this lovingly to all of you. Commit this year. I want you to commit to being an action taker. And I want you to say that to yourself. I am an action taker because what happens is when you start to take action, All of a sudden possibilities open up and all of a sudden you are now chasing opportunities instead of just thinking about the opportunities you could be chasing.

Let me say that again. Now all of a sudden you are chasing opportunities instead of thinking about the opportunities you could be chasing. The power of taking action is the most life changing thing that you can do. So a long time ago, I read about the founder of five hour energy. He's actually one of the better business minds that I have ever heard.

And the interviewer who was writing the article said to him, you know, what is some of the big things that you believe? Helped you build this business to over a billion dollars, whatever it was worth at that time. And what he said was he looked up and he said, do it now. Three words, do it now. And he said, what allowed him to build up this massive business was taking action.

If something comes in, you need to do it now. And if you have a whole list of things, you need to do the hardest thing. First, Mark Twain is famous for saying first thing in the morning, you need to eat a frog. And what he means by that is that you need to do the hardest. Thing first, the most difficult thing.

The thing that you do not want to do, you need to do that first, every single day, and then everything else throughout the day will become easier. So overall take more action this year. Don't just think about taking action. Take. Actual action. And so everything you read, try to apply as much of it as possible, or try to think about it as this is something I'm going to have to teach.

And so as you go through this, you'll see you take so much more action and your life is going to change dramatically. So this year I want you to take more action. Now let's jump into a break and we'll be right back. Number 23. Is I want you to increase your connections or increase your network in your field.

So you've heard the cheesy saying your network is your net worth. And in a lot of ways, that's just a fun phrase. And a lot of people say, but overall, I see that as a truth. Now we did an episode years ago. With a guy named Jordan Harbinger. And if you don't know who Jordan Harbinger is, I think he has a top 50 podcasts in the world.

And he has one of the largest podcasts in the world. I think his podcast makes over 10 million per year. And Jordan Harbinger is a master networker. And in that episode is actually one of my favorite interviews that we've ever done. It was one of the first interviews I ever did. And so I wasn't as seasoned as of an interviewer as I am now.

But in that episode. We talk about how to network and he has a plan that helps you network for five minutes every single day. So I'm going to summarize it here, but I highly recommend you go back and you listen to that episode. Uh, I think it's from like 2021, maybe 2022. And when we did that episode, he has this thing that he does where he reaches out to four people every single day, and he does it in some way where he can actually provide value to them.

So number one, he's looking to provide value to somebody. Number two, he's just looking to reach out, seeing how people are doing. And so what he's doing is he's making all these connections every single year. So you can think 365 days per year, making four connections per day. It takes him five minutes per day, and he reaches out.

CRM that he has, but he genuinely is reaching out and trying to see how they're doing or how he can help or how everything's going. Or if he sees they have a big milestone, he reaches out and says, congratulations. And so this is a way that you can network. If you're a huge introvert, this is a fantastic system.

Another way to go out there and network. Is making sure that you're going to conferences in your industry. If you go to conferences in your industry, you're going to meet other people in your industry. And what's going to happen is you're going to grow these connections with all of these amazing people.

And a lot of times, if you've never gone to conferences before, what you're going to find out that's going to happen is that maybe the first time you go, you're kind of freezing up. You don't want to just go up and talk to random people, but that's the name of the game. When you go to conferences, you just got to go up and you start talking to people.

And the more people you talk to, the more opportunities you're going to see are opening up for you. And so making those connections is really, really important. No matter what industry you're in, it's really helpful overall. So I want you to focus some time on networking and I want you to focus, you know, just a small chunk of your time, either daily or weekly on how can I build up my network?

Now, one cool tip that I got a long time ago when it came to networking was if you really want to network with somebody who is way, way up there, it's a huge person in your industry, and it is very difficult for you to actually get in contact with that person. One of the best ways to do this is to go out and find their number two.

Who is their number two person that is with them all the time, that knows everything about them, that is their sidekick basically. Who is their number two person and how can you get in with them? Because a lot of times it is 10 times easier to get in with that person's number two than it is to get in with the actual person.

And so that is one way if you're trying to network with big, big names or big time connections within your industry, that is one cool way to actually get in. A number of different times for me, and I know a number of other people who it's worked for as well, and so if there's somebody out there, you want to get to know, get to know the people around them, and that's really helpful for networking overall.

But like I said, take five minutes a day and just put together that system. At the very least, you don't even have to leave your house by doing that system where you're reaching out to those people. You don't want to do it on social media. You want to do it either via text or email or phone call, but just check in and see how people are doing.

And I love when people do this for me, even though I know what they're doing. I love when people check in with me and they just continue that networking and making sure they touch and make an impact on someone's life. So, um, definitely a huge thing for you to do in the next year, but I promise you, if you do it, you're going to see an impact in your life for the better.

Now, number 24 is get updated on all the 2024 changes. So we just talked about all the retirement account changes for things like the 401k, the Roth catch up deadline extensions. Also like secure plan 2. 0 is a big one. What are some of the ones that we didn't talk about? So one of the ones we didn't talk about is rollovers to Roth IRA from the 529 plan.

So one of which is making sure you understand that in 2024, you can roll over up to 35, 000 in total from your 529 plan to your Roth IRA. Now there are limitations to this. People just love to say that you can just roll over that 35 grand, no questions asked. You still have to have that rollover limit of 7, 000 per year.

So say for example, you have a kid that goes to college and your kids go to college and they get a full line of scholarships. And so they're not going to use the money in the five 29. They don't have siblings to hand that money down. And you have 30, 000 in that five 29 plan. Well, what you can do is over the course of the next couple of years, you can roll 7, 000 per year.

Over the course of the next couple of years. Now, the plan has to have been open for 15 years is the other caveat. So most people don't talk about that one either, uh, but you have to have the plan open. So if you have a 529 plan open and you've overfunded it, you can start rolling money over into a Roth.

Uh, it is a great exit plan for a lot of people. Now, when it comes to Secure 2. 0, there's some other things that did change like the RMD age increase. So for required minimum distributions, the age increased to 73 in 2023 and will increase to 75 after December 21st, 2032. 2032 just sounds so weird to say out loud.

So there's also RMD penalty reductions. So the penalties went down, which is good. And then the Roth 401k RMD elimination. So starting in 2024, this is a big one. Roth 401ks will no longer have RMD requirements similar to Roth IRAs. Well, well, well, because that happened, your boy really loves Roth 401ks now.

I mean that it makes it a really, really powerful account because you can get more money. In there, uh, and you still get a lot of those potential benefits that you would get in a Roth IRA. So if you have an option at work between a Roth 401k and a Roth IRA, and you do not make a massive amount of money overall, every single year, I love the Roth 401k is one of my favorite accounts.

Cause you get more dollars in there. And another cool one that Secure Act 2. 0 is launching here coming up is starting in 2024, employers can add an emergency savings account linked with their retirement plans, enabling workers to save up to 2, 500 in a Roth account. So that is another really cool one.

There are some gift tax changes as well. So the annual gift tax exclusion will increase to 18, 000 per recipient in 2024. So that's up 1, 000 from 17 grand in 2023. That continues to go up every single year, giving you a grade out. If you have a taxable brokerage and you want to hand that down to your children, uh, this is a great, great option for a lot of people is utilizing that annual gift tax exclusion and then the estate and gift tax exemption.

So estate and gift tax exemption will be 13. 61 million 2024 and 12. 92 million for 2023. Meaning that married couples can shield a total of 27. 2 2 million without incurring federal estate or gift tax. That my friends is when you're really wealthy and you do all the things we're talking about here and more, uh, you'll be able to take advantage of something like that.

And then social security also had a cost of living adjustment. So social security payments will increase by 3. 2 percent in 2024 as part of the COLA or cost of living adjustment, uh, with the estate average retirement benefit going up by 59 per month. On average, it's usually 1848 and it's going up to 1907.

So overall, social security is going up slightly. It's probably not enough for most people on fixed incomes, but it is something. And so overall, that is another update that is happening over the course of this year. So just making sure you're kind of reading up. On a lot of those updates and seeing which ones pertain to you, just circle them up, which ones pertain to you and make sure you make those adjustments.

So look at your retirement accounts, make those adjustments on those contributions, look at all of these different things for this year. And then also making sure you're just taking a look at your net worth and updating that, uh, is going to help you look at your total financial picture. So listen, these are the 24 things that you need to do with your money in 2024.

I hope you enjoyed this list. I sure enjoyed talking through it with you and. I want to thank you guys for listening to these episodes. And I want to thank you for investing in yourself. Cause that's exactly what you're doing. When you listen to this podcast is you are investing in yourself. And that is the first thing.

And the number one way you want to invest your time and energy is in yourself. So thank you guys so much for listening to this episode and we will see you on the next episode.

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