3 Game Changing Financial Resolutions to Set in 2023
There’s no better time than January to refresh your financial goals and habits. There’s a reason New Year’s Resolutions are so popular—after a hectic holiday season, a refresh feels good. This is especially true when it comes to financial resolutions.
Let’s take a closer look at some great financial resolutions to set in 2023 and why they’re a good idea.
1. Find the Right Budgeting Method
The holidays are expensive and conveniently land at the end of the year when we can get a clearer picture of how much we earned and spent last year. This makes the first month of the new year the ideal time to review and reset your budget. You probably already have this plan, but what your resolution should be is to find a budgeting method that actually works for you.
There’s not much point in creating a budget if you find it hard to stick with. Luckily, there are tons of different budgeting methods you can turn to and some may work much better for you than others. Take some time to think about your personality and test out a few different methods that may work for you. See how easy your chosen methods are to stick to and pick your favorite method at the end of January.
Here are a few popular budgeting methods to get your started:
50/30/20 budget. This budgeting method divides your income into three categories: 50% for necessities, 30% for wants, and 20% for savings and debt repayment.
Pay yourself first. The pay yourself first budgeting method involves setting aside a certain portion of your income for savings and investing before paying your bills and other expenses.
Zero-based budget. The zero-based budget is a financial plan in which you allocate every dollar of your income to specific expenses, savings goals, or investments, with the goal of having a balance of zero at the end of the month.
2. Save More for Retirement
Setting up direct contributions from your paycheck into your retirement accounts is a great way to make saving for retirement automatic. The problem is, it’s easy to set and forget these contributions. When reviewing your budget, make it a goal to increase your retirement contributions. As our income increases over time, it’s important to be more aggressive when it comes to saving for the future.
3. Break Free of “Bad” Debt
Some debts are a necessity and help you make major progress in your financial life—like a mortgage loan. Point being, not all debt is bad. There’s no need to panic if you have a responsible source of debt like student loans. That being said, one of your major financial resolutions this year should be to get out from under any bad sources of debt (aka debt that does not help you make financial progress). Circle back to your budget and make extra room in it to make additional debt payments each month to any high-interest debt (like credit cards) or debt that isn’t helping you reach goals (a personal loan used to pay for a vacation for example).