Make 2023 Your Best Financial Year Yet With This 3-Step Checklist

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Setting goals and planning are the cornerstones of financial success.


Main points

  • The first step is to review your financial goals so you know what to focus on this year.
  • A great way to make sure you stay on track financially is to create a budget and net worth statement.
  • A financial plan can help you reach your financial goals and track your progress.

The start of a new year is the perfect time to reset and manage your finances. Whether you’re just starting your career, or have been playing for a long time, everyone should ask themselves three important questions about their finances.

  1. Where do I want to go?
  2. Where am I now?
  3. How do I get there?

Following this checklist will help you answer these questions and make 2023 your best financial year yet.

1. Set your financial goals

Setting your financial goals answers the first question. Without first knowing what your financial goals are, there is nothing to do or focus on. Your financial goals can help give you a sense of direction and motivation when things get tough. Take the time to write it and post it somewhere easy to see.

You can further break it down by short term, medium term and long term. Long-term goals may be to retire at a certain age; a mid-term savings goal for a household; and a short-term goal is to save enough for your emergency fund. Make your goals SMART (specific, measurable, attainable, relevant, time-based) and share your goals with others to help keep you accountable.

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2. Make a budget and net worth statement

This answers the second question, “Where are you now?” Just like a GPS tracker, you need to know exactly where you are right now so you can know the path to reach your goal. Creating a budget and a net worth statement is not as scary as it sounds. In fact, this is one of the most important steps you can take when planning for your financial future.

A budget helps you track your income and expenses so you know where your money is going each month. It also allows you to plan ahead and prioritize how much you want to save each month. Your net worth statement is a list of your assets (cash, investments, property, etc.) and your liabilities (credit card debt, loans, mortgages, etc.).

Once you have a clear picture of your finances, it will be easier to make smart decisions about your spending habits and what liabilities to reduce so that you can achieve your financial goals.

3. Create a financial plan

Now that you know where you want to go and where you are now financially, you can create a financial strategy and plan to get there. Let’s say you want to retire at age 50 living on $50,000 a year (your goal). If you are now 30 years old and have just paid for your education, but have little savings (budget and net worth), how much do you need to save? The answer will depend on a variety of factors, but by using the 4% retirement rule and assuming a 10% annual return, you should be able to save about $1,600 a month (how you arrive at there) to reach your goal. You can’t afford that? Then you can change your goals. This is why knowing your budget and net worth is so important!

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Saving money should be at the top of everyone’s list when it comes to their financial future. Start with create an emergency fund. It’s always good to have some money saved for unexpected expenses or emergencies that come up. Then, work on setting longer term savings goals and maxing you retirement accounts. You should also consider setting aside extra funds each month especially for big purchases like cars, vacations, or home renovations so those things don’t become a financial burden down the road.

Any financial plan should address paying off any debt as quickly as possible. Credit cards, car payments, and other debts — these can all add up quickly if they aren’t taken care of quickly. The sooner they are paid off, the more money you can use each month to save. Consider consolidating any high-interest debt into a loan with a lower interest rate to make it easier to keep track of payments and manage your overall debt level.

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As part of your financial plan don’t forget to look at your insurance coverage. Do you have adequate life insurance, home insurance, and other types of coverage? Do you need a will or estate plan for your beneficiaries? Addressing these issues is also an important aspect of your plan and will help give you greater peace of mind.

Making small changes now can lead to big results later. This checklist provides just a few simple steps that anyone can take today to create a secure financial future for themselves. Your plan will help you track your progress toward your goals. So why wait? Start taking control of your finances today and set yourself up for success in 2023. With this checklist in hand, nothing can stop you from reaching your financial goals this year!

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