Each new year brings with it the whisper of promise, opportunity, and best of all: a fresh start. You might be one who loves making (and keeping) New Year’s resolutions every year . . . or you might be one to avoid it at all costs. No matter how you feel about New Year’s resolutions (like flossing every day or losing 50 pounds), thinking about what you want to do differently in the year ahead is always good practice–especially when it comes to your finances. That’s right, it’s time to start making your financial resolutions for 2023.
2023 Financial Resolutions
According to a new study by The Ascent, 66% of Americans are planning on making 2023 financial resolutions.1 You might think that number would make up the Gen X population, but you might be surprised to find out that 73% of millennials and 61% of baby boomers plan on making financial resolutions this year.2 And over 50% of those financial resolutions will be focused on paying off debt.3
It seems that making New Year’s financial resolutions are becoming more of a trend this year, especially as inflation hits our wallets. You might be tempted to think that inflation is a good reason to not make financial resolutions. But it’s just the opposite. With prices of food, gas, and pretty much everything going up, it may be a good time to take a close look at your money habits.
Four Financial Resolutions to Get You On Track in 2023
Now that you know financial resolutions seem to be things to consider, you might be wondering what a financial resolution looks like. Here’s a list of our top four ideas for creating your own New Year’s financial resolutions. But remember, these aren’t the kind of resolutions you should set and forget. In order to make and keep your financial resolutions, you’ve got to be intentional. Check in on them daily, weekly, monthly, and quarterly. And if you need help, your financial advisor would be a valuable resource to help you reach your goals.
1. Pay off outstanding debt.
Like we said earlier, 53% of Americans are making a goal to pay off debt this year.4 If you’ve got a pile of debt laying around, it may make sense to start making a plan to pay this debt off! You can use debt payoff methods like the debt snowball, debt avalanche, or just throwing any extra money you have toward your debt with the highest interest rate. It may seem daunting, but the relief you’ll feel when it’s completely gone is worth the effort.
2. Stick to a budget.
The best way to keep track of your finances in the new year (and stick to them) is by creating a monthly budget. When you plan out where your money is going every single month, you’ll be surprised at how organized your finances can be. And if you’re not sure how to get started, start with a zero-based budget, a 50-20-10 budget, or by keeping track of your income and expenses in a spreadsheet. But here’s the kicker: You have to stay on top of it. If you don’t track your spending through the month, there’s a chance you’ll overspend and forget about your goals altogether.
3. Invest for the future.
This is a big one. Life never stops and the revolving door of our wallet doesn’t either. That’s why it’s so important to plan ahead for your future . . . right now. Dependent on your individual situation, there are numerous investment vehicles that are designed to help you get your money where you want it to be when you’re ready to retire. And if you’re already investing, maybe it’s time to invest a little more of your income each month. Remember, you don’t have to do it alone. Invite a SageSpring advisor to be on your financial team and we’ll help you design a plan to get to where you want to go.
Do you have a rainy-day fund? If not, it’s time to start one in 2023. Life is unexpected and comes with financial surprises at every turn. If you’re not prepared, you may find yourself in a difficult financial situation. This is where that rainy day (or emergency fund) comes into play. Making a goal to save three to six months of expenses—or more—will be a nice pillow the next time you need a new set of tires. You can also explore various higher interest-earning accounts that can pay what may be a favorable interest rate on your money you are saving.
The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of SageSpring Wealth Partners and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Past performance does not guarantee future results.
Every investor’s situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment. Prior to making an investment decision, please consult with your financial advisor about your individual situation.
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