W E A LT H & F I N A N C E
FINANCIAL GOALS for 2023 BY MIRIAM CALDWELL
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START BUDGETING Budgeting is the most important thing you can do is be financially successful. People can make a lot of money and still struggle financially if they do not manage their money well. Budgeting has two important parts–creating a budget and sticking to it. Setting up a personal budget for the first time may be intimidating, but you shouldn't let that stop you. Tracking your income and expenses for the month can not only help you get a better picture of your finances but it can also help you plan better for any financial decisions. For example, looking at your spending may help you differentiate between things you want and things you need, and that can lead to a change in spending habits. Once you've decided to set up a budget, it can be as simple as using a budgeting app. So, you have your budget in place, but sticking to it might not be as simple. If you have a hard time sticking to a budget you may consider using the envelope system. This will help you to stop spending once you have reached the limit each month.
Goals for Your Budget • • •
Set up a monthly budget to track income and expenses Differentiate between spending categories and prioritize needs instead of wants Reduce your spending in specific categories each month
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• Make some provisions for unexpected spending • Stick to your budget for a whole year • Budget with your spouse or other family members
REPAY YOUR DEBT Getting out of debt is another key step to taking control of your finances. A budget will give you a pretty good idea of how much debt you owe and what means you have to repay it. The first step is to prioritize paying debt with the highest interest rates off as soon as possible (most likely your credit cards). By doing that you can reduce the amount you pay in interest. For example, if you have $10,000 in credit card debt and pay 19% interest, you're paying $1,900 per year in just interest cost. By discharging your highest interest debt first, you're not only bringing down what you pay as interest, but you can save or use that money elsewhere.
Note Falling behind or defaulting on your debt payments can hurt your credit score and make it harder for you to take out loans again. You should start by setting up a debt payment plan, then make a commitment to stick to your payment plan all year long. It is also an incredible feeling to be debt-free. You have more freedom to do the things that you want to do. You achieve greater job flexibility and more peace of mind. While it may take some sacrifice to make it happen, it is worth the effort.
Goals to Get Out of Debt • •
Identify and prioritize repaying high interest debt as quickly as possible Set up a debt payment plan
This story first appeared on The Balance, a website about personal finances.
he New Year is a great time to set some good financial goals. But don't go crazy. Be sure to set small realistic goals that will help you work toward your larger goals. You may want to start with a large goal such as buying a house or retiring early and then look at the things you will need to do to reach that larger goal. Regardless of your goal, it's wise to set up a support system to make it easier to reach your financial goals. It's also important to measure your progress periodically throughout the year. Consider these financial goals to take on in the New Year.
