The arrival of the new year marks a time of change and transition, and it’s perfectly suited for the development of goals to make the coming year the best one yet. Check out these essential financial resolutions for the new year.
Eager to improve your financial situation? Consider incorporating these five financial resolutions into your plan for starting 2023 right.
5 Essential Financial Resolutions for 2023
1. Get budgeting.
Some moms have been sticking to budgets religiously for years on end, but that’s not the case for everyone. If you haven’t already created a budget for your household, it’s never too late to start.
Create a budget that encompasses even the most minute details of your day-to-day life. The right budget should cover how much money is going toward savings, obligatory expenses, and discretionary spending alike, so everything’s accounted for. Plus, comparing your planned budget to your current habits offers a great way to identify areas of improvement.
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2. Pad your emergency fund.
Every household needs an emergency fund for moments when things take a turn for the worse, whether due to unexpected medical expenses or a house fire. An emergency fund acts as a safeguard against the debt that these types of emergencies can incur, allowing your family to make the most of a stressful situation.
A common recommendation is to set aside at least enough money to cover three to six months of living expenses. This should be more than enough to take care of less-serious emergencies, including pricey automotive repairs, while providing enough breathing room that you won’t be left floundering if something more serious should occur.
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3. Save strategically.
Funneling a bit of your paycheck to a standard personal savings account is an important start down the path to prosperity, but it’s still just a start, and there are several steps you can take to help your savings grow faster.
Think about enlisting the assistance of a financial advisor. They’re trained to help individuals in virtually any financial situation achieve their long-term goals. The right advisor will get to know you, your family, and your family’s goals in order to provide a personalized plan that can help you make the most of your money.
Common saving avenues that might factor into the mix include high-yield savings accounts, which accrue greater interest than typical savings accounts, investing in stocks or even moving your savings to a local credit union to take advantage of a higher interest rate.
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4. Conquer your credit card debt.
Any credit card debts that are building up interest fees should be tackled as soon as possible. There are several methods you can use to pay off credit card debt, and just as many ways to use credit cards more wisely in the future.
One common approach is the avalanche method. It involves paying off debts beginning with the highest interest rate, regardless of the balance. This method is a great choice if you’re aiming to keep overall interest paid to a minimum.
The snowball method might come in handy if you need extra motivation to face your debts. Simply pay off your credit cards from the smallest balance to the largest, and the quick successes that come in the beginning should help drive you to your goal.
Depending on your situation, you can try other options, too. Consolidating your credit card debt onto a balance transfer card with a 0% introductory APR, for example, can help you fend off interest payments for months at a time.
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5. Maximize savings on everyday items.
Some expenses can’t be avoided, but there are simple ways to help cut the costs of these items for major savings over time. When it comes to food, for example, using coupons is a timeless method that’s made much easier with the internet. Bigger families can also consider buying food in bulk.
Fuel is another pricey necessity. Try using an app that can help you find the lowest local gas price. Prefer a specific gas station? Sign up for its discount program. You’ll typically only save a few cents per gallon, but if you travel or deal with a hefty commute, it makes a difference.
Finally, use a rewards credit card. Many offer cash back on must-have items, including both gas groceries, as well as a certain percentage back on all purchases, allowing rewards to build up fairly quickly. Just make sure to look out for cards free from annual fees. Plus, pay off your statement balance each month – otherwise, you’ll have to pay interest fees that offset the rewards.
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There’s No One-Size-Fits-All Solution to Finance
These tips can serve as a valuable helping hand as you work to make 2023 your most prosperous year yet, but they’re only the tip of the personal-finance iceberg. Always remember that each household is different, and what doesn’t work for one mom might be a miracle for the next.