Let’s reflect on how often we turn a new page of your life. Every Monday? Or every night (tomorrow I won’t stay awake till 2 a.m. watching Netflix)?
Beginning of a new calendar year is a good reason to give your spending habits a fresh start. If you’re looking for ideas, here are some smart money habits to start in 2023.
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1. Set a financial goal to yourself
The simplest and crucial step to start with is setting a goal and the milestones. The goal will motivate you while the milestones will help you not to get lost in the long run. If we do not measure our income and output let’s humbly suggest we are not able to properly organize and save money.
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2. Invest
Bad news: stock market didn’t perform well in 2022. Good news: you can buy stocks at a lower price right now. When the stock prices are down you basically earn more. It is commonly recommended to invest at least 10% of your income.
Recommended and most secure ways of investments for 2023 are bonds, certificates of deposits and money market funds.
Bonds are the least risky to invest – once the bond is mature you are guaranteed to get your money back plus the interest.
Certificate of deposit (CD) is a specific type of a savings account that lets you choose the certain period of time you invest in. The longer period you choose the more interest you get.
Money market fund is a type of a mutual fund where your money is invested by professionals who diversify your holdings. Just keep in mind that a money market account is federally insured while a money market fund is not.
3. Use the 50-30-20 method
A popular and simple approach to control your finances. 50% of your income should go on your needs, the essential things like grocery shopping, cell phone and internet, gas, mortgage, monthly bills like electricity.
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30% – on your needs, eating out, travels, entertainment.
20% – on your savings. If you haven’t started your emergency fund yet, do it in 2023. It would be smart to build a 6-months emergency fund.
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4. Review your current insurance (or insurances)
Make sure all the major spheres of your life are covered with the insurances: life insurance, job insurance, car and of course, health. Do your own research or address a financial counselor, this investment is absolutely needed in a fast-changing world. Review is also needed to make sure you get the best options and do not overpay.
5. Try to save even more for retirement
Apart from your six-months emergency fund, maximize your retirement savings. Depending on your income and lifestyle it can be from 10 to 20% from your overall earnings.
6. Spend wisely
Except getting healthier spending and saving habits also spent on what matters to you. Brainstorm the ideas with your family and friends. Maybe a new hobby or traveling non-ordinary route will raise you mentally and will boost your life plans. 2023 claims that experiences and emotions are worth purchasing rather than things.
This type of brainstorm may also help you to find areas not worth the money so it’s also a way to diminish irrelevant waste of your hard-earned cash.
7. Protect the finances of your family
It may sound morbid but it’s better to think now how to ensure your assets. Make sure you write your will and assign all the beneficiaries and trustees.Review your estate and insurances so that your family stays protected in case of emergency.
8. Team up with a friend
Get a friend with whom you can be quite candid about your money. Once you say your financial purposes aloud you’ll feel the motivation to walk faster towards them. Not to mention that traveling together and sharing hotel expenses can be pretty saving for both of you. Stay frugal, have fun!
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And let us finish this list of 2023 financial habits with a wise and wonderful tip from financial adviser and author Suze Orman: “You are never powerful in life until you are powerful over your own money — how you think about it, feel about it, and invest it”.
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