2023 is the perfect opportunity to take back control of your finances and create a blank slate for yourself. You can create several resolutions and goals that you want to achieve and work through them throughout the year. Take the chance to improve your financial well-being this year. Continue reading to learn 4 ways to set yourself up for success in 2023.
1. Pay Down Your Debt
Your debt could be hindering you from reaching other goals that you have set for yourself. The monthly payments can quickly eat up a portion of your income every month that could go to savings, investments, or other avenues.
To free up more of your funds, develop a plan to pay down your debt. Start by creating a list of all of your debt accounts with the current balance, interest rate, minimum monthly payment, and loan term (if applicable). Then organize the list from the highest interest rate to the lowest to figure out what debt to start paying off first. High-interest rate debt can be taken to your balance, making your minimum monthly payments only cover the interest.
To pay down your debt faster, find space within your budget to free up more funds to allocate towards your debt repayment. The quicker you pay down your debt, the quicker you can become debt free and focus on other financial goals.
2. Set Up Automatic Transfers For Savings
If one of your goals is to save more money, you can automate your transfers to send money to your savings accounts on the days you get paid. You can do this for any of your savings accounts, including high-yield savings accounts, mutual funds, and retirement accounts. This is helpful to prevent you from spending the money prior to putting money towards savings.
3. Consider A Roth IRA
Saving for retirement should be a consistent financial priority. Even though you have decades to save, your nest egg must sustain you for decades in retirement. It can be very beneficial to have multiple different types of retirement accounts to take advantage of the tax benefits for each one. Roth Individual Retirement Accounts (IRA) do not come with a tax benefit when you contribute since you will use after-tax dollars, but you get tax-free growth and withdraws later on.
In 2023, the contribution limit for Roth IRAs is $6,500 with a $1,000 catch-up contribution if you are 50 years old and up. Take advantage of Roth IRAs, you’ll thank yourself later.
4. Analyze Your Investments
The current market can be concerning if you have investments, making this a good opportunity to evaluate your investment portfolio. Even with the market being unsettling, do not pull your money out; this could end up hurting you more in the long run. Instead, make a few adjustments. One of the best adjustments you could make is to diversify your portfolio by investing in other industries and asset classes. Diversification is a great way to mitigate risk and maximize returns by not having all of your funds invested in only a few industries or asset classes.
To make sure you set yourself up for success and stay on that path throughout 2023, have a knowledgeable and trustworthy financial advisor on your side. Our financial advisors at LifeBridge Financial can help you reach your personal financial goals. Schedule your consultation with us today.