As we enter a fresh year, it is a great time to make new financial resolutions, identify milestones and work towards reaching them.
The Bank Of America conducted a survey to study the financial mood of Americans. The survey states that around 80% of those questioned had already set their financial goals for 2023. As part of their financial journey, people are planning to increase their savings, get debt-free, and pay off their credit card bills.
Here’s a quick guide on how to start on a fresh financial journey in 2023.
1. Prepare a monthly budget
Tracking your expenses and following a proper budget helps identify your expenses and limit unnecessary spending. Following a budget is also a great way to categorize finances and save more in 2023.
When setting your 2023 budget, you can follow a simple rule:
- Keep 50% of your budget for essentials and needs.
- 30% for ‘wants’ like going out, dinners, OTT subscriptions, etc.
- The remaining 20% goes directly into your savings or to pay off your debts.
2. Set up an emergency fund
It is always wise to save for a bad day. Being financially ready for any future eventualities is important to give a fresh new start to your financial journey. And a perfect financial plan has a place for emergency funds.
An emergency fund not only keeps you prepared to tackle any uncertainty that may come your way, but also safeguards your financial stability at that time. It helps you stay debt-free and ensures your monthly recurring expenses are undisturbed.
If your financial resolution for 2023 does not include ways to keep a dedicated amount of money for the year ahead yet, it’s time you set up an emergency fund.
3. Clear your debt
Nothing like a plan that helps you stay debt-free. Make debt elimination the prime financial resolution for 2023 and experience smooth economic growth.
High-interest debt can be an added burden that keeps you from saving for your future and your retirement.
If you are struggling with paying off any high-interest debt or loan then let clearing that debt be the focus of your new year.
4. Prioritize your wellness
Let this new year be an opportunity for you to prioritize your health and well-being. As they say, health is wealth. With good health, you can earn good wealth. Give some thought to your existing lifestyle and identify which parts need tweaking.
Get a health cover for yourself and your family if you don’t have any. The surge in medical costs over the last few years highlights that with a good medical plan, you can save a lot of money during an emergency.
5. Consider investing in ways that matter to you
Having a side income nowadays is a must. If you have a good income source you can earn extra with your saved money. You can consider investing in mutual funds or stocks which will give you extra income. Investments like these allow your money in 2023 to grow faster.
You should make sure that you diversify your investment portfolio to give a fresh start to your financial goals in 2023. Investing in more than one asset can help you decrease the risk of loss. If you face a loss in one, you may get a good return from another.
6. Prepare for a positive tax return
If your income lies in any tax slab, you have to pay income tax by any means. The tax takes out a significant amount of your income. This can be reduced if you plan your taxes well in advance. You can research and understand the different kinds of tax slabs applicable in the next year.
Financial resolutions are a great way to give your new year a fresh start. Quality planning helps you save money. 2023 can be the year that sees you earn a substantial income and have a solid financial plan in place. Small changes to your budget, saving contributions, a debt repayment strategy, and spending habits can help you achieve your 2023 financial resolutions faster.
