A new year is often a chance for a fresh start. It is a moment to take a look at what you have achieved in the past and what you hope to accomplish in the future. That’s what makes it a great time to decide to get your finances in order so that you can find stability and independence.

                By                    Crystal Mayer

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Whether you are drowning in debt or have dreams of homeownership, you can lay the foundation for financial freedom by following six simple steps. Use this 2023 financial blueprint to make the next 12 months your best ones yet. 

Set Big Goals…

If you hope to make 2023 a financial success, you need to set big goals. Write down the top five things that you want to achieve by the end of the year. Maybe you hope to have at least $10,000 in savings or pay down a credit card. Whatever it is, write it down and then set achievable milestones along the way. 

For instance, if you hope to save $10,000 by the end of the year that means you would need to save a little over $830 each month. If you haven’t had a significant change in income or haven’t been able to save this much before now, you will need to reevaluate how you spend your money and where you can pull from to put it in savings.

…And Small Ones

Along with big goals, you should be setting smaller ones, too. Small financial goals can be something like setting up bills on autopay so that you never miss a payment. You may also want to consider finding ways to save money such as cutting unused subscriptions. Setting smaller goals can help you stay on track since you feel the reward sooner than with the larger ones.

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Start With a Clear-Cut, Manageable Budget

Once you have a firm idea of your financial goals for the new year, you need to write out a comprehensive budget so that you’ll be able to make room for those goals. 

According to Bank of America, the best way to create a budget is to:

  • Figure out your net income.
  • Track and categorize spending.
  • Set short-term and long-term goals (although it might be best to do this first).
  • Decide how much to spend on what.
  • Adjust your spending.
  • Review regularly.

The bank suggests that people consider using the 50/30/20 budget rule. This rule states that 50% of your net income should be spent on needs (house payment, car payment, utilities and groceries), 30% of your money should go to wants (shopping, vacations, discretionary spending) and 20% should be put toward savings or paying down debt.

Plan To Pay Down High-Interest Credit Card Debt

If you are one of the millions of Americans with crushing credit card debt, 2023 should be the year you decide to pay it down. Credit card debt can consume you, making it difficult for you to achieve financial stability. Before you move on to the other goals you hope to achieve for the year, you need to focus on getting a clean slate. 

If you only pay the minimum payments on your credit cards, it will take years to pay it all off. There are several methods, but a popular one is to focus on the cards with the highest interest rates first and pay as much as you can each month. Once you have paid those off, take the amount that you were paying on them and put it toward your other credit cards until each one is paid off. If you’re charged interest on your lower-interest cards, remember to continue making the minimum payments on them.

You can also look into things like debt consolidation or balance transfers to help you pay off high balances. The most important thing is to stay consistent and not take on new debt unless there is an emergency and no other options.

Stash Away Savings

If you are debt free or close to it, the next thing you should focus on is building your savings. Ideally, you have a rainy day stash of cash that is easily accessible in case of an emergency. You should also have a more substantial amount put away in the bank. 

Prepare For Your Future Retirement

Finally, now is the time to start preparing for your future. It does not matter whether you are 23 or 53, you need to be thinking about retirement. The earlier you start the better. Research different retirement plans to determine which one best fits your specific needs or, better yet, consider meeting with a financial advisor to see how you can make 2023 your most successful to date. 

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