These are the first 5 financial steps you should take in 2023

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Get started with them early for a successful financial year.

Main points:

  • The steps you take at the start of the new year can set you on a solid path.
  • These specific tasks, such as setting a budget, estimating your emergency fund, and more, will help you manage your income, increase your savings, and avoid losing unnecessary interest in debt.

The beginning of a new year can be read as a fresh start for many. And it’s a great time to pay close attention to your finances. After all, you probably have near and long-term goals on your radar. And the smarter you are about managing your money, the more likely you are to achieve it. With that in mind, here are the first five financial steps you should take after 2023.

1. Set a budget

Your income may change in 2023 and your expenses may stay the same. That’s why it’s important to budget at the beginning of the year. This way, you can see what accounts you need to manage and make sure you don’t go overboard on any single expense category.

2. Assess your emergency fund

It’s always a good idea to have enough money in your savings account to cover at least three months of living expenses. The beginning of the year is a great time to look at your savings balance and crunch some numbers to make sure you can pay those three months of bills. If not, it will be a wake-up call to make more room in your budget for savings.

3. Make a debt repayment plan

Maybe you racked up some debt over the holidays. Or maybe you were carrying a credit card balance before the holiday season started and didn’t get around to paying it off in 2022. Now is the time to figure out how you’re going to tackle your debt so that it ends up being gone by the end of the year. year, if not sooner. That could mean looking for ways to consolidate your debt, such as taking out a personal loan to pay off balances on various credit cards, or transferring the balance onto a new credit card.

4. Review your credit report

Your credit report depicts how reliable a borrower you are. It’s a good idea to read that report carefully and address any issues that might lead lenders to believe they shouldn’t lend you money, such as a history of late payments. It’s also important to check your credit report for errors that could hurt your chances of getting approved for a loan. Credit report errors are not that uncommon, and you’ll definitely want to address any errors you find.

5. Set up an automatic transfer to your IRA

Allocating money to retirement savings can be tricky when you have immediate payments. Putting the process on autopilot is a great idea. Many IRAs allow you to set up an automatic rollover so that money is deposited into your retirement plan each month right off the bat. That’s money you won’t be tempted to spend, which could lead to a bigger nest egg.

You may have a number of different financial issues that you hope to resolve in the new year. But it’s a good idea to prioritize these five points as you recover from your New Year’s Eve and get ready to take on 2023.

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