Experts: 4 Steps to Achieving Your Financial Goals for 2023
The last year created financial anxiety that millions of people will carry into 2023 — and the proof is in their resolutions.
A GOBankingRates survey of more than 1,000 adults showed that getting out of debt, earning more money, saving more money and sticking to a budget are the top financial goals for 2023. People are making these resolutions as part of plans to buy cars, buy homes, take expensive vacations, expand their families and other financial milestones. The biggest roadblocks they’re facing are inflation and the stress of living paycheck to paycheck.
So how can people bring their financial resolutions to fruition in an era of rising prices, sinking stocks and high interest rates?
GOBankingRates asked experts from a variety of backgrounds about the steps people should take on their paths to financial betterment — and you can put them into practice no matter what you hope to get out of 2023.
Sticking to a Budget Makes All Other Goals Possible
A little more than 10% of the study’s respondents said their primary goal for 2023 was to stick to a budget once and for all. More people are prioritizing spending, saving and debt reduction, but none of those important goals are achievable without a spending plan.
“As we move into the new year, it’s important to look at our habits and challenge ourselves to reach our goals,” said Greg Wilson, CFA and co-founder of ChaChing Queen. “The key is understanding where your money goes. Sit down and look at your credit card and bank statements over the last 24 months. Then pick a budget that works for you. Having a budget and sticking to it is one of the most valuable tools for controlling spending.”
Among the most popular budgeting strategies:
- Pay yourself first
- Envelope-based budgeting
- Zero-based budgeting
- Values-based budgeting
Work Debt Reduction Into Your New Budget
Eliminating toxic debt is the financial equivalent of quitting smoking — and America knows it. Around 25% of the study’s respondents are focused on reducing what they owe in 2023.
Their success will hinge largely on the strategy they choose.
“I recommend prioritizing your highest-interest commitments first, combined with breaking your monthly payments in half and paying twice a month,” said Trae Bodge, personal finance expert and founder of TrueTrae.com. “This helps to save on interest and can be very effective, especially with larger debts.”
Bodge’s favorite strategy — attacking high-interest debts first — is the avalanche method. Others recommend the snowball method, which offers quick wins by tackling the smallest debts first.
Saving Money Is the Key to Wealth
The highest percentage of respondents, around 28%, have prioritized saving more money in the new year — and they have the benefit of good timing. The silver lining of the inflation crisis of 2022 was rising interest rates, which are bad for buyers but great for savers.
Most of the experts who spoke with GOBankingRates suggested putting your savings on autopilot by automating transfers to a dedicated account.
“Start with a small amount that you know you can adhere to and increase as your financial situation improves,” Bodge said.
Julie Ramhold, a consumer analyst with DealNews.com, suggested trying a savings challenge to boost your emergency fund.
“There are plenty of savings challenges out there that are designed to cover 30 days or 52 weeks or something in between, but you can also create your own,” she said. “They often involve depositing a certain amount each day or week so that, by the end of the challenge, you have a significant amount of savings to the tune of $500, $1,000 or even more.
“These challenges make it easy to create and stick to a plan so that you have a clear goal in sight rather than just a generic ‘save money.’ Vague goals like that make it easier to ignore or fall out of the habit, so having specific things to work toward will ensure it’s easier to stick to in the long run.”
The Golden Rule of Income: More Is Always Better
The other major priority of the survey’s respondents is earning more money — about 23% are focused on boosting their incomes in 2023.
“If you have any kind of creativity, you may be able to monetize it for a little extra income in a side hustle,” Ramhold said. “For example, if you can create digital study guides, planners, even motivational posters that can be printed out by customers, you can add them to an Etsy store or through Amazon to sell your products.
“You can also create designs on sites like RedBubble and CafePress and … any time someone buys one of your designs, it’ll net a small amount of cash. The biggest thing to remember is that these are passive so they can be good for extra cash, but they’re not going to be the equivalent of a second job, so temper your expectations.”
You also can increase your income through self-improvement and the building of marketable skills.
“Capitalize on gaining specialized skills to expand your earning opportunities and secure a more stable income stream,” said Adam Garcia, founder of The Stock Dork. “You can achieve this by strategically spending on intensive training and seminars to upskill. Through this, you can gain better experiences and enhance your talent even more.”
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