Every time a new year begins, millions of people establish a set of goals and purposes to be better and be happier. Many of these include getting in good physical shape or eliminating certain bad habits, but many forget the importance of financial health.
Various experts and financial planners have made a list of goals that consumers should keep in mind to stay economically calm during 2023. These are some:
1.- Create a monthly expense budget
Personal finance experts recommend reviewing or establishing a monthly spending budget as part of planning for 2023. It will be necessary to do a review on what will be spent on each month.
The keys to your budget is that you prioritize your basic expenses, such as the purchase of food and fuel, and the payment of housing, either a mortgage or rent. Expenditures on education also fall under this heading.
2.- Update your personal balance
January is a great time of year for people to realize their financial position. For this reason it is good to dedicate time to list assets and debts that were acquired in 2022 to be able to set goals for 2023.
Eliminate debts as far as possible and keep up with payments of credit card balances or credits type “buy now, pay later” is very important to prevent your debts from growing.
3.- Dealing with debts
For those who end the year with credit card debt, it is recommended to list the amount owed and the interest rate on each card. so it will be possible make a plan to pay starting with the card with the highest interest rate.
Financial advisors also suggest calling card companies and request a rate reduction on cards with high interest rates.
Those with a mortgage may want to make a plan to pay it off faster. Bi-monthly payments are suggested to expedite payment. Or, a little more can be gradually added to each payment.
4.- Make contributions for retirement
the IRS has increased 401(k) annual contribution limits for individuals in 2023 to $22,500 for those under 50 and $30,000 for seniors. Those increases also apply to 403(b) and 456 plans.
Experts recommend trying to maximize them, if possible, to take advantage of tax savings of these long-term investment plans.
5.- Do an investment review
It is recommended to take the time to analyze the investment portfolio and consider rebalancing it if it is “overweight” in some sectors.
If you have an advisor, it would be a good idea to set up a meeting to review the progress of the portfolio and any changes that may be appropriate in the new year.
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Source: La Opinion
