12 Financial New Yearʼs Resolutions for 2023

Last updated Jun. 25, 2024 by Peter Jakes

Entering the New Year with a fresh perspective is always invigorating. Among the most important considerations as we usher in 2023 is our financial wellness. Achieving and maintaining financial stability requires dedication, discipline, and thoughtful planning. Making New Year’s resolutions can be an excellent way to set clear and achievable financial goals. Here are 12 Financial New Year’s Resolutions that can transform your financial health in 2023 and beyond:

1. Create and Stick to a Budget

One of the foundational steps to achieving financial health is creating a detailed budget. A budget helps you track income and expenses, thereby allowing you to manage your money effectively.

How to:

• List all sources of income
• Track all monthly expenses (rent, utilities, groceries, etc.)
• Allocate funds for savings and emergency purposes
• Use budgeting apps or software to simplify the process

2. Build an Emergency Fund

An emergency fund acts as a financial cushion in times of unexpected expenses, such as medical emergencies or sudden job loss. Aim to save three to six months’ worth of living expenses.

How to:

• Open a separate savings account for your emergency fund
• Set up automatic transfers from your checking account to your emergency savings
• Cut unnecessary expenses and redirect those funds to your emergency savings

3. Pay Down Debt

Debt can be a significant burden on financial health. Prioritizing debt repayment, particularly high-interest debt like credit card balances, can reduce financial stress and improve credit scores.

How to:

• List all your debts and interest rates
• Implement the debt snowball or avalanche method
• Consider consolidating your debt for a lower interest rate

4. Improve Your Credit Score

Your credit score can impact your ability to get loans, rent an apartment, or even get a job. Improving your credit score should be a priority.

How to:

• Check your credit report for inconsistencies and errors
• Pay bills on time
• Reduce your credit card balances

5. Save for Retirement

Retirement may seem far away, but saving early can make a significant difference due to the power of compound interest.

How to:

• Maximize contributions to employer-sponsored retirement plans like a 401(k)
• Open an IRA if you don’t have access to a 401(k)
• Consult with a financial advisor for personalized advice

6. Review Subscriptions and Memberships

Monthly subscriptions and memberships can add up over time. Reviewing and canceling unnecessary services can free up funds for other financial goals.

How to:

• List all subscriptions and memberships
• Assess the necessity of each
• Cancel those that are not essential

7. Invest Regularly

Investing can help grow your wealth over time. By developing an investment strategy that matches your risk tolerance and financial goals, you can set yourself up for future financial success.

How to:

• Open a brokerage account
• Invest in diversified assets like stocks, bonds, and mutual funds
• Consider using robo-advisors if you are new to investing.

8. Increase Your Income

Exploring opportunities to increase your income can provide more flexibility to save, spend, and invest.

How to:

• Ask for a raise or seek promotions at your current job
• Develop side hustles that align with your skills and interests
• Invest in further education or training to enhance your earning potential

9. Control Impulse Spending

Impulse spending can derail your financial plans. Controlling it requires mindfulness and preparation.

How to:

• Create a waiting period before making non-essential purchases
• Use lists for shopping trips to prevent unplanned buying
• Set aside a small amount for discretionary spending to avoid feeling deprived

10. Plan for Large Purchases

Whether it’s a home, car, or vacation, planning for large purchases helps you avoid unnecessary debt and financial strain.

How to:

• Start saving early for big expenses
• Research thoroughly to get the best deals
• Evaluate whether financing options are necessary and manageable

11. Educate Yourself About Personal Finance

Knowledge is power, especially in personal finance. Educating yourself about financial principles can empower you to make informed decisions.

How to:

• Read books and blogs on personal finance
• Attend financial workshops and seminars
• Follow reputable financial advisors and experts on social media for tips and updates

12. Set Specific Financial Goals

Having specific, measurable, achievable, relevant, and time-bound (SMART) financial goals can keep you motivated and on track.

How to:

• Define your financial objectives clearly
• Break down long-term goals into actionable short-term steps
• Regularly review and adjust your goals to remain aligned with your financial situation

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Frequently Asked Questions (FAQs)

1. How do I create a budget?

Creating a budget involves listing all sources of income and all monthly expenses. You categorize these expenses as either fixed (e.g., rent, mortgage) or variable (e.g., groceries, entertainment), and then track your spending to ensure it aligns with your income and financial goals.

2. Why is an emergency fund important?

An emergency fund provides a safety net during unexpected financial situations, such as medical emergencies or job loss. It ensures that you have quick access to funds without the need to rely on high-interest loans or credit cards.

3. What is the best way to pay down debt?

Using strategies like the debt snowball method (focusing on paying off smaller debts first) or the avalanche method (paying off debts with the highest interest rates first) can help you systematically reduce your debt burden.

4. How can I improve my credit score?

Improving your credit score involves paying your bills on time, reducing outstanding debts, and ensuring you have a mix of credit types. Regularly checking your credit report for errors and disputing any inaccuracies can also help.

5. How much should I save for retirement?

The amount you should save for retirement depends on factors like your current age, lifestyle expectations, and income. Financial advisors often recommend saving at least 15% of your annual income.

6. How do I start investing?

Starting to invest involves opening a brokerage account, choosing investment assets that align with your financial goals, and diversifying your portfolio to mitigate risk. For beginners, robo-advisors can offer user-friendly platforms for starting investments.

7. Why should I review my subscriptions and memberships?

Reviewing subscriptions and memberships helps identify unnecessary recurring expenses, freeing up funds for more critical financial goals like savings and investments.

8. How can I increase my income?

Increasing your income can be achieved through asking for a raise, seeking promotions, starting a side hustle, or investing in education and skills development to enhance your earning potential.

9. How do I control impulse spending?

Controlling impulse spending can be managed through practices such as implementing a waiting period for non-essential purchases, using shopping lists, and setting aside a specific budget for discretionary spending.

10. What should I consider when planning for large purchases?

When planning for large purchases, start saving early, research thoroughly for the best deals, and determine if financing options are necessary and within your budget.

11. How can I educate myself about personal finance?

You can educate yourself about personal finance by reading books, blogs, attending workshops, and following financial experts for tips and updates. Continuous learning is key to staying informed and making sound financial decisions.

12. How do I set SMART financial goals?

Setting SMART financial goals involves being specific about what you want to achieve, ensuring the goals are measurable, achievable, relevant to your financial situation, and time-bound for clear deadlines. Regularly reviewing and adjusting these goals is essential for ongoing success.