New Year’s Resolutions for Personal Finance 2023. A new year brings new opportunities for self-improvement and growth. For many of us, this includes making resolutions to get our finances in order. Whether you’re looking to reduce debt, build savings, or just establish better spending habits, there’s no time like the new year to get started.
Here are some smart resolutions for your personal finance goals in the new year that actually make sense to implement at any time of the year!
New Year’s Resolutions for Personal Finance 2023
Create a Budget and Stick to It
One of the most effective ways to take control of your finances is to create a budget and stick to it. Write down your monthly income and expenses, and make adjustments to prioritize spending in areas that matter most to you.
An effective way to make a personal budget is to follow the 50/30/20 rule. This means dividing your after-tax income into three categories: 50% for necessities (such as housing, food, and transportation), 30% for wants (such as dining out, and entertainment), and 20% for savings and investing.
Steps to making a personal budget:
- Determine your monthly after-tax income.
- List out all of your monthly expenses, including fixed expenses (such as rent or mortgage) and variable expenses (such as groceries and entertainment).
- Categorize your expenses into necessities, wants, and savings/debt repayment.
- Compare your actual spending to the budget you have set for each category.
- Make adjustments as needed to ensure that your spending aligns with your budget and goals.
It’s also important to regularly review and adjust your budget as your financial situation changes over time. Having a budget can help you stay on track with your financial goals and avoid overspending.
New Year’s Resolutions for Personal Finance 2023
Reduce Debt
If you have high-interest debt, focus on paying it down as quickly as possible. You may consider transferring your balance to a lower-interest credit card or working with a financial advisor to come up with a debt repayment plan.
New Year’s Resolutions for Personal Finance 2023
Build an Emergency Fund.
Aim to save at least three to six months of living expenses in case of an unexpected event, such as a job loss or medical emergency.
Determine the amount you want to have in your emergency fund and set a timeline for achieving that goal. Starting small and gradually increasing your savings can help you avoid feeling overwhelmed.
Building an emergency fund takes time and discipline, but the peace of mind that comes with having a cushion for unexpected expenses is worth the effort.
New Year’s Resolutions for Personal Finance 2023
Save for Big-Ticket Items.
Whether you’re saving for a down payment on a home, a new car, or a dream vacation, having a specific savings goal in mind can help keep you motivated to keep a closer eye on your finances in general.
Want to make saving even easier? Consider setting up automatic transfers from your paycheque to your savings account to ensure that you’re consistently putting away money each month.
New Year’s Resolutions for Personal Finance 2023
Invest in Your Future.
First-time investors may feel overwhelmed by the number of options and information available, but with the right guidance, they can make smart investment decisions. Here are some tips for first-time investors:
- Start with a clear investment goal: Determine what you hope to achieve with your investment, such as saving for retirement or generating passive income.
- Get familiar with the different types of investments: Stocks, bonds, mutual funds, real estate, and more all have different benefits and risks. Understanding these options is key to making informed investment decisions.
- Create a diverse portfolio: Diversification is important to minimize risk, so consider spreading your investments across different types of assets and industries.
- Educate yourself: Read books, articles, and online resources about personal finance and investment strategies. Attending investment seminars or workshops can also be a valuable learning experience.
- Seek professional advice: Consider seeking guidance from a financial advisor or investment professional if you have questions or need help developing an investment strategy.
- Start small: If you’re new to investing, don’t sink your entire savings into one investment. Start small, and gradually increase your investment over time as you become more comfortable with the process.
- Be patient: Investing is a long-term game, so don’t get discouraged if you experience short-term losses. Focus on your goals, and stay committed to your investment strategy over time.
- Monitor your investments regularly: Stay informed about your investments and the markets. Keep track of their performance, and make changes as needed to help ensure you’re on track to achieve your goals.
- Don’t chase returns: Avoid the temptation to make impulsive investment decisions based on short-term market performance. Instead, focus on building a balanced and diversified portfolio that aligns with your long-term goals.
- Be prepared to take calculated risks: While it’s important to minimize risk, investing always involves some level of uncertainty. Be prepared to take calculated risks in pursuit of long-term gains.
New Year’s Resolutions for Personal Finance 2023
Shop Around for Better Deals.
Whether it’s for insurance, utilities, or everyday purchases, it pays to shop around for the best deal. Take the time to compare prices and find the best value for your money.
Cut Unnecessary Expenses.
Take a look at your monthly expenses and identify areas where you can cut back. This could include things like subscription services you no longer use or eating out less often.
Speaking of unnecessary expenses, try to avoid impulse purchases. Before making a bigger purchase, New Year’s Resolutions for Personal Finance 2023 a step back and think about whether it’s really necessary. Can you wait a few days or a week to make the purchase? Will it still be a good value if you do?
Protect Your Assets, Including Yourself
Make sure you have more than adequate insurance coverage for your home, car, and other assets to protect yourself in case of an accident or loss.
You should also remember that, for you and your family, your health is one of your biggest assets. Having a good medical aid plan in place for you and your family is another very smart financial move.
Some people underestimate the value of a medical aid plan or skip them because they are young and healthy. But medical aid is an efficient approach to financially protect yourself if you or your family require medical attention or supplies. When healthcare procedures and medications occur on a regular basis or suddenly, the costs can quickly add up.
For example, did you know that if your darling bundle of joy arrives unexpectedly early and needs to be admitted to the NICU, the cost each night is more than R12,000? And that’s excluding physicians, drugs, and whatever else they may require… Consider an unexpected three-week stay… will your savings cover it? You’re looking at well over R100,000 just because your birth plans didn’t turn out as expected!
New Year’s Resolutions for Personal Finance 2023
Educate Yourself
Take the time to learn about personal finance and investing, and make sure you understand the risks and benefits of any financial decisions you make. Consider setting up an appointment with a financial advisor too, as they can be an excellent resource to help ensure that you stick to your new year’s financial resolutions and get the most out of every penny you make. Speak to one of our Independent Financial Advisors today and get set for a bumper year.
Investing for the Best Returns in 2023