Make 2023 your best financial year yet with this 3-step checklist

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Goal setting and planning are the cornerstones of financial success.

the main points

  • The first step is to review your financial goals so you know what to focus on this year.
  • A great way to ensure that you stay on the right track financially is to create a budget and net worth statement.
  • A financial plan will help you achieve your financial goals and track your progress.

The beginning of a new year is the perfect time to reset and take charge of your finances. Whether you’re just starting out in 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 will I get there?

Following this checklist can help you answer those questions and make 2023 your best fiscal year yet.

1. Set your financial goals

Setting your financial goals answers the first question. Without first defining your financial goals, there will be nothing to work towards or focus on. Your financial goals help give you a sense of direction and motivation when the going gets tough. Take some time to write it down and post it somewhere easy for you to see.

You can divide it into short, medium and long term. Long-term goals might be to retire at a certain age; A mid-term goal is to save for a home; The short-term goal may be to provide enough for emergency fund. Make your goals SMART (Specific, Measurable, Attainable, Relevant, and Time-Based) and share your goals with others so they can help you be accountable.

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 your exact current location so that you know the path to reach your goal. Create a budget And a net worth statement isn’t as scary as it sounds. In fact, it is one of the most important steps you can take when planning your financial future.

A budget helps you keep track of your income and expenses so you know exactly where your money goes 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 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 what commitments 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 are financially, you can create a financial strategy and plan to get there. Let’s say you want to retire at age 50 and live on $50,000 a year (your goal). If you are currently 30 and have just paid off your education, but have very little savings (both budget and net worth), how much do you need to save? The answer will depend on a variety of factors, but 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 you afford it? Then you may have to adjust your goals. This is why knowing your budget and net worth is so important!

Saving money should be at the top of everyone’s list when it comes to their financial future. start with Create an emergency fund. It’s always good to have some Save cash away For unexpected expenses or emergencies that arise. Next, work on creating long-term savings goals and your max retirement accounts. You should also consider setting aside extra money each month specifically for large purchases like cars, vacations, or home renovations so that these items don’t become a huge financial burden down the road.

Any financial plan you will need to address Pay off any debts As soon as possible. Credit cards, car payments, other debts—these all add up quickly if not dealt with right away. The earlier you pay it off, the more money you’ll have each month saving. Consider consolidating any high-interest debt in one loan With a low interest rate so that it is easy to track payments and manage overall debt levels.

As part of your financial plan, don’t forget to take a look at your insurance coverage. Have you had enough? life insuranceAnd home insurance and other forms of coverage? Do you need a will or estate plan for beneficiaries? Addressing these issues is also an important aspect of your plan and will help give you greater peace of mind.

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

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