Interestingly, goal setting is more common among younger Americans, Gallup found. Seventy-nine percent of adults ages 18 to 34 say they are likely to make resolutions for 2023, compared to 62 percent of those 55 and older.
Gallup found that most Americans said they would focus on improving their health or fitness in 2023, and nearly half would do the same for their finances.
If you haven’t made financial decisions yet, let me help you. Here are seven money habits you need to break this year.
1. FOMO on cryptocurrencies. Hopefully, the fear of losing cryptocurrency will be eradicated in 2023. And there were plenty of examples in 2022 of how risky buying cryptocurrencies can be. Several large crypto companies collapsed last year. Sam Bankman Friedthe former CEO of FTX, one of the largest cryptocurrency exchanges in the world, was Accused with criminal fraud.
The regulators of the Federal Bank issued a Joint statement This week highlights crypto risks for banking institutions. There is no federal insurance that covers cryptocurrency exchange failures. “The events of the past year were marked by significant volatility and exposure of vulnerabilities in the crypto-asset sector,” the organizers said.
Cryptocurrencies are highly speculative, which can be financially disastrous for inexperienced investors.
2. Take on credit card debt. The average interest rate on credit cards at the end of 2022 was 19.77 percent, according to CreditCards.com.
The cost of credit card debt will increase in 2023 as a result of the Federal Reserve’s anti-inflationary mission. The Fed noted that inflation, while low, remains “unacceptably high,” which is likely to lead to further rate hikes throughout 2023.
As a result of the Fed’s actions, average credit card interest rates are certain to continue to rise in the new year, according to Ted Rossman, senior industry analyst at Bank And CreditCards.com.
3. Tax refund. The average tax refund was $3,253, up 13.6 percent year-over-year, according to the latest numbers from the IRS for the 2022 filing season. Many people like getting what they consider a windfall or forced savings plan. But with inflation cutting into your paycheck, you’re better off getting your money’s worth during the year, especially if you have high-interest credit card debt. Here’s another reason to change deductions now.
When you intentionally get your money back, you are lending the federal government your money interest-free. When savings rates were very low, the financial loss was not so great. The highest FDIC-insured liquid savings account, Rossman points out, currently yields just over 4 percent annually.
For chain redemption proponents, I understand that you may struggle with managing your money. However, as I said before, just because something has worked for you in the past doesn’t mean you shouldn’t re-examine its effectiveness.
If you carry credit card debt with a 20 percent interest rate, waiting for a lump sum tax refund to pay it off is costing you money. This is bad money management.
4. Eating out too much. In 2021, the typical household spent $3,030 per year on food away from home, according to the Bureau of Labor Statistics (BLS).
Here’s a way to scare you into eating out less. Add up all the money you spent eating out last year. When I challenged one family to do this for a month, they found they had spent $1,500.
Realistically, you’ll likely continue to eat out, but set a goal this year to significantly reduce what you spend on eating out. Just think about what you can do with that money – build an emergency fund, pay down debt, or increase your retirement savings.
5. Autopilot bill payment. Automating your payments is a great way to avoid accruing late fees. But inertia can set in, and you end up paying for subscriptions you don’t use. The monthly price may seem affordable at $4.99. But it can add multiple services.
the The BLS found that Americans spent the most an average of $574.75 per year on “cable and satellite television services” in 2021.
For a month, keep a record of what you read, listen to, or watch on your TV or mobile device. If you only watch one or two shows on a streaming service, it may not be worth the money.
In general, having auto-pay is a good idea, but not if you set it and forget it, driving up your monthly fees for services you no longer use or need.
6. Fear of repair costs. It’s understandable that you’re concerned about the cost of repairing your car or replacing faulty hardware. But that fear can lead you to buy an expensive extended warranty plan that you either don’t need or find difficult to use.
Consumer Reports He warns again and againMany extended car warranty policies are a bad deal. a reconsidering Going through consumers’ checkbook of home warranty plans, I’ve found that they’re rarely worth the price or the hassle.
It is often better to save the money you need to fix your car or repair appliances. Now start putting expected repair costs into your budget.
7. Spending on fast food. Americans’ out-of-pocket health spending rose 10.4 percent in 2021, according to the Centers for Medicare and Medicaid Services’ annual national health expenditures. Report.
Some health conditions can be prevented. Bad diet choices have contributed to High prevalence of obesity in the United States—41.9 percent of adults—which puts them at increased risk for several serious health conditions, such as heart disease, stroke, and Type 2 diabetes.
“The cost of diabetes management can be unsustainable,” he says. According to the American Diabetes Associationindicating that the price of the four most common types of insulin has tripled in the past decade.
One of my New Year’s resolutions is to improve the quality of my diet.
Right to eat And Exercising regularly Good for your health – and your money.