The initial afterglow of the arrival of a new year is just behind us, and now it's time to get to work making this year one that we can look back on and celebrate. From a financial perspective, that means tangible action on your part to turn the tide on tough times, build on prior positive efforts or create a fresh start. The following five ideas aren't new, but with a new focus on them, they could help you win in 2023.
At this point, inflation has left few unscathed. It has impacted where and how much we are spending. The extent will vary based on your personal spending habits. Taking the time and effort to track where your money is currently going will provide the intel you need to make decisions and adjustments that align with your personal values and goals. Make it happen; don't let it happen to you.
Save a Bit More.
If you're still working, this is about the time when pay increases become a reality. Social Security and military retirement recipients received about a 9% raise this year. While you may need that boost just to keep pace with inflation -- your spending assessment will tell you -- it might provide an opportunity to build your cash cushion or save for other goals. Take advantage of the opportunity.
Revisit Your 'Why'.
When was the last time you reviewed your written goals? That was a bit of a loaded question but very purposeful on my part. Your goals provide the motivation and direction for all you do financially. If they are stale or not front and center or don't exist, that could be what's holding you back.
Rerun Your Projections.
Combine rising costs and the 2022 bear market, and it's pretty likely things have changed. Your vision, and the accompanying price tag for retirement or any of your goals, may need a fresh look and perhaps some course corrections in your day-to-day actions. The goal is the destination, but understanding where you are on the path to that goal is key to doing what's necessary to get there. This effort will help you answer the question, "How much money should I have saved?" in the context of all that's happened.
My wife and I were discussing a potential 2023 getaway last week. Unfortunately, as we pored over our calendars, there just didn't seem to be a way to make it happen. That whole experience had me thinking, "Where's our balance?" We haven't arrived at a happy solution for that discussion yet, but we will. So should you. One lesson we have taken from the last couple of years is the need for goodness in the journey.
If there is a uniting theme in these five moves, it's revisiting and assessing your everyday financial activities. Doing so, and being deliberate and purposeful, may be all it takes to elevate your personal finances to a new level in 2023.
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