Academy
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Jan 7, 2023
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7 mins read

2023 New Year's Financial Resolutions

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The start of a new year is a great time to set goals for yourself, primarily related to your finances. Starting with a clean slate and creating a plan for the money milestones you hope to reach can help you hit the ground running in 2023. But it's really important, even before making a list of your financial goals for the New year, to review some of your goals from the previous year that you set at the beginning of that year and consider whether you could achieve them. If you could not reach a goal, think about why that might have been. Was it because you didn't have enough resources? Did you encounter unexpected setbacks or obstacles?

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Once you know how you achieved your financial goals from the previous year, you can start thinking about what you can do differently in the new year to improve your chances of success. This might include setting more achievable goals, developing a budget to help you better manage your resources, or finding ways to increase your income.

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Let's now dive in and look at some of the financial goals you can set for your New Year's resolution.

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6 Financial Resolutions for the New Year and How to get them done

Establishing clear financial goals and benchmarks is essential to help you stay on track and progress towards achieving them over time. To do this effectively, you should define your goals and then break them down into smaller, more manageable tasks. To help you get started, here are some tips for making and implementing a plan for common financial resolutions.

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1. Budgeting

A budget is a plan that helps you manage your money and reach your financial goals. It's a way to keep track of your income, expenses, and savings and make sure you're using your money in the way that's most important to you. Here are some steps to help you create a budget:

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šŸ“ŒĀ Determine your income: Start by calculating your monthly income from all sources, including your salary, any bonuses or commission, and any other income you receive.

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šŸ“ŒĀ Identify your expenses: Make a list of all your monthly expenses, including fixed costs like rent or mortgage payments and variable expenses like groceries and gas.

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šŸ“ŒĀ Calculate your savings: Determine how much money you want to save each month and include that in your budget.

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šŸ“ŒĀ Create a plan: Use your budget to plan how you'll allocate your money each month. Make sure to include savings and debt repayment as priorities.

spacer 50Hspacer 50H2023 New Year's Financial Resolutions Get-rid-of-short-term-debt

2. Get rid of short-term debt

Paying off short-term debt is a tremendous financial resolution for the new year. Here are a few steps you can take to help you achieve this goal:

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ā­Ā Create a list: Make a list of all your short-term debts, including the creditor, interest rate, and minimum monthly payment.

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ā­Ā Prioritize your debts: With the highest interest rate debts at the top of the list, by interest rate.

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ā­Ā Manage your expenses: Make a budget and cut expenses wherever possible. Use the extra money to pay off your debts faster.

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ā­Ā Increase your income: Consider increasing your income by taking on a side hustle or asking for a raise.

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3. Diversify your Investments

Diversifying your investments is an excellent way to manage risk in your portfolio. By investing in a variety of assets, you can help to protect against losses in any one particular investment. This is because different types of assets tend to perform differently under various market conditions.Ā 

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Here are a few strategies you can consider to diversify your investments:

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šŸ”– Asset allocation: This involves dividing your investments among asset classes, such as stocks, bonds, and cash. This can help to diversify your portfolio and reduce the overall risk.

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šŸ”– Diversification within asset classes: You can also diversify within each asset class. For example, you can invest in various sectors within the stock asset class, such as technology, healthcare, and financial services.

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šŸ”–Ā Geographical diversification: Investing in different regions or countries can also diversify your portfolio.

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It's important to remember that diversification does not guarantee a profit or protect against loss. It's just one way to manage risk in your portfolio. It's also important to regularly review your investment portfolio and make adjustments as needed to ensure it continues to align with your investment goals.

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4. Set Financial Goals

Setting financial goals is a great way to start the new year on the right foot and get your finances in order. Some financial goals you might consider setting include:

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šŸ’” Creating a budget: A budget can help track your income and expenses and ensure you save enough money to meet your financial goals.

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šŸ’” Building an emergency fund: An emergency fund can help you weather unexpected financial storms, such as a job loss or medical expense.

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šŸ’”Ā Saving for retirement: It's always early enough to start saving for retirement. Consider setting up a retirement account, such as a 401(k) or IRA, and contribute to it regularly.

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šŸ’” Investing: If you have some extra money that you can afford to invest, consider putting it into a diversified investment portfolio.

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Remember, it's important to be realistic when setting financial goals. Don't set yourself up for failure by trying to accomplish too much too quickly. Take small steps and celebrate each milestone along the way.

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5. Reward Yourself

One way to reward yourself as a New Year's financial resolution is to set financial goals for yourself and then reward yourself when you achieve them. This can motivate you to save money and make intelligent financial decisions. For example, you might set a goal to keep a certain amount of money by a specific date and then reward yourself with something you've wanted when you reach that goal. Some other ideas for financial rewards include a day of pampering at a spa, tickets to a sporting event or concert, or a weekend getaway to a nearby destination.

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It's important to be careful not to overspend when rewarding yourself. You want to uphold your progress by splurging on something that's too expensive or that you can't afford. Instead, try to find ways to reward yourself that are meaningful and enjoyable but that also fit within your budget.

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6. Quarterly Review

Conducting a quarterly review is a great way to stay on top of your finances and make sure you're on track to meet your financial goals. Here are some steps you can follow to make the most of your quarterly review:

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šŸ” Review your budget: Please look at your quarter budget and see how well you've stuck to it. Are there any areas where you've overspent or under-saved?

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šŸ” Look at your spending: Review your bank and credit card statements to see where your money is going. Are you spending more than you anticipated in any categories?

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šŸ” Review your debts: Please review the list of all your debts, look at their interest rates, and consider whether it makes sense to focus on paying off any high-interest debts first.

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šŸ” Adjust your plan: Based on your budget, spending, debts, and financial goals, develop a revised plan for managing your money in the coming quarter.

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Remember to review your progress regularly and make necessary adjustments to stay on track.

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Bottom Line

Once youā€™ve settled on the goals you hope to reach in 2023, write them down, factor them into your budget, and make sure to check in on your progress regularly to determine if there are areas you need to adjust to make them happen. The most important thing is to be realistic and specific about your goals and to make a plan for how you will achieve them. It can also be helpful to track your progress and seek support from friends, family, or a financial advisor if you need help staying on track. Ultimately, the most important thing is to take control of your financial situation and work towards a better financial future. šŸ’«