Experts Say These Are the Money Resolutions You Need To Make in 2023
If your goal is to improve your financial situation in 2023, the best way to achieve this is to have some clear-cut, actionable resolutions in place. Whether you’re looking to get out of debt, buy a house, save more for retirement, take your family on a vacation or reach some other money goal, these expert-approved money resolutions will help you get there.
Stick to a Budget
“Rather than focusing on a certain dollar amount (i.e. save $x or pay down debt by $x), you may want to consider ‘living on a budget’ to be your goal for ,” said Jay Zigmont, Ph.D., CFP, founder of Childfree Wealth. “This means a commitment to setting a budget at the start of each month and weekly budget meetings to check in on progress.”
You may need to try out different budgeting techniques to find one you can stick to.
“There are lots of budgeting tools and methods, and they all work in some way, but the best one is the one that works for you,” Zigmont said. “Your commitment should be that you live on a ‘zero-based’ budget, which means that every dollar has a purpose and job before the month starts. Keep in mind that your budgets won’t be ‘right’ at first, but it is more about getting in the habit of having a budget and checking on it regularly.”
Build Up an Emergency Fund
“If you have extra cash after reviewing your budget, make sure that you have an emergency fund,” said Kerry Keihn, chief operating officer at Earth Equity Advisors. “A good general rule is to keep at least three to six months’ worth of living expenses, but it varies by person. The main reason for an emergency fund is to have enough on hand to continue to buy food and pay for your mortgage or rent if your income were to drop or an unexpected bill arises.”
If your budget doesn’t currently allow for you to save, look for expenses you can cut out or ways to bring in some extra income so that you can build up your emergency fund.
Make a Plan To Tackle Your Debt
“You can start alleviating debt stress by setting small goals and working your way up instead of trying to tackle it all at once, which could overwhelm you and make the stress worse,” said Braxton Yoeman, business consultant at Success Financial LLC. “Understand where your debt is, know the numbers and make responsible financial decisions based on this knowledge.”
There are generally two methods to paying off debt — starting with the smallest balance debt or starting with the highest interest rate debt. There’s no wrong method; just start somewhere.
Max Out Your Retirement Contributions
In 2023, the 401(k) contribution limit increases from $20,500 to $22,500; for individual retirement accounts (IRAs), it increases from $6,000 to $6,500. Those numbers are lofty, but they may seem more achievable if you break them down further.
“If your financial resolution is to maximize your Roth IRA by putting in [$6,500], you can break that down into monthly contributions of [$542] or, even better, weekly [contributions] of [$125],” said Clayton Quamme, CFP, partner and financial advisor at AP Wealth Management in Augusta, Georgia.
Automate Your Savings
“Assuming you’re paying off your monthly debt and have some funds left, allocate and automate transferring funds to your various savings accounts,” said Julie Meissner, COO at Garrison Point Advisors. “Did you get a pay raise or a bonus? Consider increasing your contributions to your retirement account by the same percentage as your raise. Maybe use your bonus to sock away an extra bit to your children’s 529s or get a jump on your ‘fun’ budget for the year.”
When you automate your contributions to your various accounts, this will ensure you stay on top of your savings goals.
Improve Your Credit Score
“Many people still struggle with bad credit scores, and [inflation] didn’t help with paying off bills,” said Dean Kaplan, president of The Kaplan Group. “Consumers should take the time to improve their credit scores, increase credit limits and stay on top of payments. With so many financial apps and credit reports readily available, people can track their progress, report errors on their credit reports and develop a better understanding of credit risks — ultimately preventing any additional financial burden.”
Some ways to improve your credit score include paying bills on time and keeping your credit utilization rate low.
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