An opportunity to create a new-and-improved financial habit or nip some bad habits in the bud comes with a new year. The following ideas could reap the rewards in the long run as you plot your financial goals for 2023.
Invest in Yourself First
You are missing out on a huge opportunity to build a nest egg to help you with financial emergencies if you don’t already set money aside each month into savings. If you have an emergency expense that can seriously derail your budget, such as a car or home repair, or a medical emergency, you may need to reevaluate your budget. Utilizing direct deposits and automatic transfers can help you build your savings without missing out on wages. They put a portion of your paycheck into an account you never see. The savings will add up quickly if you keep them out of sight.
Make a List of Big-Ticket Items
In both the present and the future, you should save for big expenses — those that are planned and those that are not. As part of your financial goals, set aside money from each paycheck into a savings or money market account if it’s an immediate expense. In the event that the big expense will occur a few years from now, you might consider investing in a certificate, which typically pays a higher rate of return than a savings account.
Clear Off Debt as Part of Your Financial Goals
You can change your life by making getting out of debt one of your financial goals. The most expensive debt you have is your credit card debt. When a balance is carried over a period of time, it can really add up. Consider consolidating your debt into a home equity line of credit (HELOC) if you have a large balance. Paying back debt at a lower interest rate and in a timely manner will save you money in the long run. When it comes to student loans or other debt, pay off the loans with the highest interest rates first and set yourself a realistic repayment schedule. When you keep your eye on the prize, you’re more likely to succeed.
Make Your Credit Score Soar
You are well aware of the importance of a strong credit score to your financial freedom. When lenders decide whether to loan you money, this is an important factor to consider. It is imperative that you maintain or build an excellent credit score to strengthen your financial choices and grow your wealth. Maintaining older lines of credit, even ones you rarely use, is a good way to accomplish this.
Look for Insurance Options
According to industry experts, you should shop for insurance at least once a year – specifically for home and auto insurance. Would you like to know if you have the right coverage? How can you reduce your costs? Are you spending too much or is there anything you can do to save money? It is inevitable that lifestyles change. The number of times you work from home has increased, and you drive far less. It is important that your auto insurance coverage reflects the way you live on a daily basis.
You should make sure your homeowner’s policy covers any improvements you’ve made and/or increases in the value of your home (i.e., replacement cost).
Your Future, Like Your Financial Goals, is in Your Hands
In five, ten, twenty, or thirty, where will you be?
You can use retirement calculators to determine how much money you’ll need for the lifestyle you plan to lead after retirement. Investing your money is an important part of building wealth.
In addition to thinking about the future, you should consider your real estate investment. What are the pros and cons of your current mortgage?
Would refinancing your home loan be a good option for you? In addition, if you’re starting the process of buying a home, what is the maximum amount you can afford?
Ensure the Safety of Your Family Members
One of the greatest gifts you can give your loved ones to make sure their estates and wills are in order. If there is no clear path outlined of what will happen to your assets if you pass away, it can be extremely difficult for your family to cope with, on top of grieving your loss. Making sure your beneficiaries and your wills are up-to-date is a great place to start.