'Tis the season of vision boards, personal development aspirations, and finishing of Christmas cakes. If you want to shake up your New Year’s resolutions from weight loss plans and reading lists, it is the perfect time to give your financial health an opportunity to be reset and reevaluated.
The best part about new years resolutions is that they can be dramatic, large plans that are quite the stretch if you're being honest. So do it - dream big.
Here are some ideas compiled from leading journals:
Create a budget plan
Your entire year's financial success likely rests on having a decent budget. Putting together a financial plan is a must, says Cynthia Pruemm, an investment advisor and the founder and CEO of SIS Financial Group in Hoffman Estates, Illinois. “Part of this process is doing a financial analysis of your income, expenses and investments," she says. Get the software that helps you create a plan, and get into the mentality of sticking to it.
Read more about budgeting here and get some budgeting app suggestions!
Get into the mentality of saving something every month
“Another resolution should be saving every month regardless of the amount,” Pruemm says.
And while saving is important every year, 2023 should be a wonderful year to do it, according to Taylor Sutherland, a San Diego-based senior wealth advisor at Halbert Hargrove.
"One benefit of the increase in interest rates is that savers are finally getting paid again," Sutherland says, referring to the trend of rising interest rates in 2022. "Cash is no longer 'trash,' so those emergency savings accounts should be earning something material."
Sutherland says that if your bank isn’t offering competitive interest rates, such as 3.5% or better, on cash, you should consider finding a reputable online savings platform.
Pay off student loans
Student loan debt is one of America's leading consumer debts. Wouldn’t it be nice if you could get rid of your student loan debt altogether? 2023 is going to be the year that you make it happen.
Paying off student loans is important because it can help improve your credit score and future financial stability. Carrying high levels of debt, especially from student loans, can make it more difficult to qualify for other forms of credit, such as a mortgage or car loan. Additionally, paying off student loans can free up money in your budget for other expenses or savings. Most importantly having no student loan debt can give you more financial freedom and peace of mind.
Making a plan to pay off your student loans, as with all other plans, is all about getting organized, as says MoneyUnderThirty. Knowing who you owe, how much you owe, and how you will afford to pay off your loans should be your first priority.
It's also good to take the time to reach out to an expert to get new ideas such as working out income-driven repayment plans or deferments that can lessen the financial blow of your current loan payments.
Reevaluating your expenses of 2022
A penny saved is a penny earned. Consciously spending less money is a great way to save in the new year. To achieve this, take a close look at your budget and identify areas where you can cut back on expenses. This can include things like reducing the frequency of coffee runs or eating out. By making a conscious effort to spend less, you can save a significant amount of money each month.
Here are a couple of reminders of activities you may have thought of cutting down:
Be more selective with subscriptions – Our world is run by subscription services - maybe even over-run. It is so easy to sign up for a bunch but insanely tricky to unsubscribe to the ones you never use. Now is your moment, to unsubscribe. Choose one TV network, one of each kind of app or service you may need. You got this.
Shop around cell phone services - Most cell phone plans are crazy expensive. If you haven’t shopped around lately, give it a try. There are several new, cheaper options that have come up. Companies compete and do so by lower prices, so it's good to revisit your plan and see if there is an option that beats your current rate. As a student, I personally love the Mint plan.
Learn how to clip coupons - Clipping coupons is an easy way to save money, especially in online shopping. Using coupons can add up to some significant savings, so look at the benefits of different services you have enlisted, such as banking, to see whether you can avail perks.
Make list - I am big on lists from to-do lists to makeup I would love to get my hands on. Day-to-day grocery lists can keep you on track financially in the midst of temptation, saving you from overspending on snacks and unneeded ingredients.
Invest in a coffee machine at home - Coffee runs add up quickly, but I agree it is one of those things you absolutely need to get through the workday. Instead of running to the coffee shop, try making coffee at home.
Eating out alternatives - Here's something to think about, if the 'eating out' spending was cut in half to $50 to $100 a week, and you placed the money in even a savings piggy bank by your bedside, by the end of 2023 you will have saved $2,600 for a year-end holiday!
Change how you think about date nights - While an important part of staying connected with your partner and meeting new people, you shouldn’t have to spend a lot of money to have a good time. Finding alternative date night ideas, like cooking dinner together at home, can help you rack in the savings.
Define your long-term financial goals
It's easy to get so wrapped up in your present financial situation and forget to prepare for the future. Setting long-term financial goals is an exciting way to keep yourself on track and to ensure that your money is working for you.
After you have defined your financial goals, be it money for grad school or a year of traveling after college, it is time to start planning for how and when you will reach them.
The only thing left to do then is aggressively work towards your goals. And MAKE 2023 your year!
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