How To Stick To Your New Year’s Financial Resolutions In 2023

With most of us hoping for a better economic outlook for 2023, it’s important to recognize how brutal 2022 has been for Americans and their wallets. Not only did the stock market drop significantly, so did cryptocurrencies. With so high inflation, the Federal Reserve hiked interest rates throughout the year, making it much more expensive to borrow money.

But the past is the past and there is nothing we can do to change it. However, you can take steps in the new year to invest more and spend less to reach your wealth-building goals.

With that in mind, you may be wondering what you can do to stick with yourself. Financial targets for 2023if you want to pay off debt, learn how to invest, or spend less on things you care less about.

Here are some tips from today’s leading financial experts.

Create a list of measurable goals

Financial Advisor David Edmisten Financial planning for the next phase says that making each step of your strategy concrete and measurable makes it easier to reach your financial goals. For example, just saying you want to save more money for retirement in 2023 isn’t specific. Instead, you should plan to increase your 401(k) contributions by a fixed amount each payment period, and then complete a form at a workplace that facilitates this increase to reach that goal.

“Setting smaller, more specific steps toward your goals that you can measure and achieve often will help you maintain the momentum to ultimately reach your goals,” says Edmisten.

Anne-Lyse, CPA and Financial Coach Dream of Legacy adds that breaking down large savings goals into smaller goals can also help. For example, if he wants to save $5,000 for emergency funds in 2023, divide that amount by 12 months, which is $417. This is an actual amount, as opposed to expecting to have enough money each month to meet your goals by the end of the year.

Breaking down your goals in this way makes them easier to reach and keeps you motivated. Not only that, people tend to lose motivation when their goals are too big.

“This strategy gives you a sense of accomplishment along the way and rewards you for doing the right things so you can stay on track,” she said.

Automate your finances

You Need a Budget (YNAB) founder and best-selling author Jesse Mecham says one of the best ways to protect your financial decisions in 2023 and beyond is to automate your finances. Whether your goal is to pay off debt, increase your retirement savings, or build an emergency fund, consider how automatic transfers and payments can help you stay on track.

By eliminating the possibility of spending money on other things, automation can help you reach your goals before the money reaches you, he says. Plus, automation can help you stick to your budget, if you have one. This is mainly because you automatically save and “pay yourself first” to ensure that your money actually goes where you want it to go each month.

Mecham says you can also consider downloading. Budgeting apps like YNAB This lets you track your spending without manually crunching numbers in confusing spreadsheets at the end of the month.

There are other budgeting apps to consider such as Mint, EveryDollar, and Honeydue. These budgeting apps help you track where your hard earned money goes month to month.

focus on getting out of debt

Hoping to save and invest more in 2023 is a lofty goal, but saddled with high-interest debt can put you in a position where you are actively working on yourself each month.

Chuck Czajka, a financial advisor in Florida, macro money concept says one of the biggest pitfalls to watch out for when trying to reach your New Year’s goals is overspending.he points to recent bank rates Research They found that more than a third of Americans have monthly credit card debt.

Chaika said rising inflation has likely caused more Americans to rely on credit to keep up with spending and daily bills. However, you shouldn’t use credit if you can’t pay off his card at the end of each month.

If you want to get out of debt, you can use various strategies to do so, including financial programs like YNAB.However, financial experts Andrea Warlock We recommend paying off high-interest debt with a balance transfer card.

Woroch adds that many cards in this niche offer 0% interest on balance transfers for 12 to 21 months, but there are fees for balance transfers.

“This will give you time to make smaller payments while reducing your debt significantly more than you would otherwise,” she said.

Save cash for emergencies

Economic emergencies are one of the biggest challenges that keep people from achieving their financial goals. After all, it’s much harder to save money and plan for the future when your world suddenly turns upside down.

Financial analyst Richard Barrington credit sesame Especially since the Federal Reserve expects the unemployment rate to rise this year, it says saving emergency funds could be key in 2023 if it wants to hit its target.

Most experts know your emergency fund Ideally, you should have at least 3-6 months of expenses not allocated to other payments.

“Emergency funds are a good way to ensure that you have money available to help you through economic downturns like periods of unemployment,” Barrington said.

“Otherwise, we may have to resort to debt, which will only exacerbate the problem by adding interest to our spending.”

Don’t let small mistakes ruin your plans

Finally, Dr. Emily Koochel, Senior Financial Planning Education Consultant.of e-money advisor says it’s important to set goals that reflect your money. However, we must also remember that humans are never perfect and our actions do not always align with our hopes for the future.

“By declaring first what is important to you and paying attention to your actions, you will be able to notice your progress toward success, identify gaps, and determine when your actions fall short of your ideals. will be,” she said.

With all this in mind, it is also important to understand that everyone makes mistakes and to “give yourself grace”. It means not giving up even if you are unable to achieve your goals for a while due to emergencies.

“If you make a ‘bad’ financial decision, take time to readjust and get back on track,” Kuchell said.

“We always have room to grow and improve.”