Make 2023 Your Best Financial Year Yet With This 3-Step Checklist

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Setting goals and planning are the cornerstones of financial success.

Main points

  • The first step is to review your financial goals so you know what to focus on this year.
  • A great way to make sure you stay on track financially is to create a budget and net worth statement.
  • A financial plan helps you reach your financial goals and track your progress.

The start of a new year is the perfect time to reset and recharge your finances. Whether you’re just starting your career or have been in the game for a while, everyone should ask themselves three important questions regarding their finances.

  1. Where do I want to go?
  2. where am i now
  3. How do I get there?

By following this checklist you can answer these questions and make 2023 your best financial year yet.

1. Set your financial goals

Setting your financial goals answers the first question. Without first deciding what your financial goals are, there will be nothing to work on or focus on. Your financial goals can help give you direction and motivation when things get tough. Take a moment to write them down and post them somewhere in easy view.

You can also divide them into short term, medium term and long term. Long-term goals can be to retire at a certain age; A mid-term goal to save for a home; And the short-term goal is to save enough for your emergency fund. Make your goals SMART (specific, measurable, attainable, relevant, time-based) and share your goals with others so they can help keep you accountable.

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2. Create a budget and net worth statement

This answers the second question, “Where are you now?” Like a GPS tracker, you need to know exactly where you are right now so you know the way to reach your destination. Creating a budget and net worth statement is not as intimidating as it sounds. In fact, this is one of the most important steps you can take when planning for your financial future.

A budget helps you track your income and expenses so you know where your money is going each month. It also allows you to plan ahead and prioritize how much money you want to save each month. Your net worth statement is a list of your assets (cash, investments, property, etc.) and your liabilities (credit card debt, loans, mortgages, etc.).

Once you have a clear picture of your finances, it will be easier to make smart decisions about your spending habits and which obligations to cut so you can reach your financial goals.

3. Create a financial plan

Now that you know where you want to go and where you currently stand financially, you can create a financial strategy and a plan to get there. Let’s say you want to retire at age 50 with $50,000 a year (your goal). If you are currently 30 years old, paid for your education and have little savings (budget and net worth), how much should you save? The answer depends on a variety of factors, but by using the 4% retirement rule and assuming a 10% annual return, you’ll need to save about $1,600 per month (how you’ll get there) to reach your goal. Can’t afford that? Then you need to adjust your goals. That’s why knowing your budget and net worth is so important!

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Saving money should be at the top of everyone’s list when it comes to their financial future. Start by Setting up an emergency fund. It is always good to save some cash for unexpected expenses or emergencies. Next, work toward creating long-term savings goals Your maximum Retirement Accounts. You should also consider setting aside extra funds each month specifically for big purchases like cars, vacations, or home renovations so those items don’t become too financially burdensome.

Any financial plan requires paying off any debt as soon as possible. Credit cards, car payments and other debts — all of which can add up quickly if not taken care of promptly. The sooner they are paid off, the more money you have available each month to save. Consider consolidating any high-interest debt into one loan with a lower interest rate to make it easier to track payments and manage your overall debt levels.

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Don’t forget to look at your insurance coverage as part of your financial planning. Do you have adequate life insurance, home insurance and other types of coverage? Do you need a will or estate plan for your beneficiaries? Addressing these issues is also an important part of your plan and can help give you greater peace of mind.

Making small changes now will bring big results later. This checklist provides some simple steps anyone can take today to create a secure financial future for themselves. Your plan will help you track your progress toward your goals. So why wait? Start taking control of your finances now and prepare yourself for success in 2023. With this checklist in hand, nothing is stopping you from achieving your financial goals this year!

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