Start Planning Now For a Brighter Financial Future in 2023

pNow that 2023 is right around the corner, it’s a good time to look ahead at planning for a brighter financial future. You can review your financial moves in 2022 and consider what worked well and what didn’t. For many people, 2022 was a year to recover financially from the troubles caused by the pandemic. Hopefully, your household was able to make some strides toward getting back on track. The following ideas may help you make even more progress in 2023./ppCreate a Budget/ppCreating a budget is the most effective way to keep your money in check. The first step in creating a budget is figuring out your income and your spending. You can do this by taking a look at your bank statements and credit card statements./ppNext, think about your financial goals. You may have short term goals, such as paying off debt or saving for a college fund. Or you may have long term goals, such as buying a home. Whatever your goal is, set a timeframe and make a list./ppMake a list of expenses that are fixed. These expenses include mortgage payments, car loans, insurance, etc. You will also want to consider other expenses that are billed periodically, such as taxes. These are often billed annually or semi-annually./ppNext, consider variable expenses. These expenses can vary from month to month. Examples include utility bills, fuel, childcare, road tolls, etc./ppOnce you have a list of fixed and variable expenses, you can calculate your discretionary expenses. Discretionary expenses are those that are your choice. These may include things like hobbies, clothing, entertainment and dining out./ppYou can use a budgeting spreadsheet or a budgeting app. Using a spreadsheet is a more formal method. However, you may also want to create a budget on paper. Then, you can hold yourself accountable by writing down every dollar that leaves your wallet./ppSave More Money/ppWhether you're on a budget or simply want to get out of debt, saving money can help you achieve your goals. Saving can also be a great way to relieve stress related to fear of not being able to pay upcoming bills./ppThe key is to save and spend smartly. The best way to do this is to develop a budget. The budget will help you determine how much you can save each month without jeopardizing your financial goals./ppWhen you're on a budget, you need to start by cutting unnecessary spending. This includes things like memberships, subscriptions, and streaming services. Eliminating these expenses can make a big difference in your budget./ppTry switching your cell phone provider. You may be able to haggle with your current provider and save money. Also, look into buying a prepaid phone plan, which are usually cheaper than premium cell phone providers./ppYou can also look for free events in your area for entertainment. There are a variety of free museums and library perks to check out./ppLook into using a free online spending tracker to help you keep track of your expenses./ppYou can also set up an auto-deposit for a specific amount into your savings account every time you receive a paycheck. This can add up to a large amount in a short amount of time./ppIt's important to keep track of your spending so you can see which areas are causing the most problems. You can use free online spending trackers or even make a simple spreadsheet./ppYou can also try using an investment account (versus a traditional savings account) for saving money. Putting a specific amount into your investment account every payday can help you avoid impulse buying./ppLive Below Your Means/ppLiving below your means is related to saving money, but a little bit different. You can strive to save money while still spending every last penny that’s left over. Living below your means entails several strategies./ppPut your bonus into savings. Did you get a holiday bonus or a performance bonus this year? Instead of spending it on some extravagance that you’ve “always wanted,” put it away in a rainy day fund, or consider investing it./ppIgnore your pay raise. If you recently got a raise, consider ignoring it. That is, put the extra net amount into your savings instead of adding it to your household budget. You might not notice an extra $100 a week in your budget, but you’ll certainly notice your savings account growing by an extra $400 a month!/ppStop upgrading. Tech companies like us to believe that we’re losing out unless we buy the latest plasma TV or iPhone. But those constant upgrades are like chasing your own tail. You’ll never get there. If your old car/TV/phone still work, there’s no reason to run out and buy new ones./ppChoose an Investment/ppOnce you start seeing your savings account grow, you may be inspired to invest some of that money. Investing can be a wise choice. There are more opportunities to invest than ever before. You can invest in real estate in a variety of ways, buy stocks, bonds, buy a business and much more./ppBefore investing, make sure you are in a financially sound position where you won’t lose your shirt if your investment goes south. For help determining your financial health, consult with your CPA. Your CPA may also help you determine a figure that is safe for you to invest. Remember to keep some of your savings liquid for emergencies./ppConsider Changing Jobs/ppThe pandemic had a major impact on the job market. Many employers went through a period where they were paying out hiring bonuses just to get employees. Consider your employment position now. Is it possible you could increase your income by getting a new job? It’s worth considering if all other factors, like job fulfillment and happiness, make sense for you and your household./ppAs you get serious about your finances in 2023, no doubt you’ll come up with even more ways to get ahead and thrive financially. For added help, consult with your CPA for smart money moves in 2023./p