Making better financial decisions in the new year is one of the most popular New Year's resolutions. One reason why people make this resolution, and then fail to achieve it, is that they try to change too many things at once.
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Instead of trying to fix everything about your finances all at once, focus on improving a few key areas first. That way you'll be less likely to become overwhelmed by the process, and are more likely to succeed with your goals.
Here are some tips for making your finances more secure in 2023:
Make an honest assessment
Start with an honest assessment of your income and expenses, including money you may have tucked away that's not accounted for on your monthly spending plan. Don't forget to include any non-monthly expenses like car repairs or vacations.
If you are behind on bills, pay them as soon as possible. If you can't make the full payment, work toward catching up by paying at least what's past due. Don't assume that just because you paid off one debt you can now go back to living paycheck-to-paycheck. It's important to keep all debts on a budget so they don't come back to haunt you later.
Set specific goals.
Many times when people set goals, they don't have a plan for achieving them. People often say things like, "I'm going to save more money," or "I want to pay off my debt." But without a strategy for getting there, these statements just sound good. It's important to create specific steps to reach your goals.
You can do this by writing out the steps in order, then breaking those steps into small, actionable tasks that you can accomplish over time. This will help ensure that you're meeting your goals instead of simply saying you want to meet them.
For example: If you want to save $10,000 in 2023, but without a target date and an achievable amount, it becomes hard to know if you're on track. So, instead, you might break down your goal into smaller steps, such as saving $500 per month.
Then, you would need to decide how much you could put aside each paycheck. If you're only able to contribute $200 per week, perhaps you should skip buying lunch a couple of days a week, so that you can put the extra $100 toward your savings.
Get rid of bad habits.
There are plenty of ways to improve your financial health, but some of them require more discipline than others. For instance, if you typically spend more than you earn, you may not be able to cut back on spending overnight. Instead, start by looking for opportunities to cut expenses elsewhere.
Maybe you can eat out less frequently, or use coupons to lower the cost of your groceries. In other cases, you may find that it takes more willpower to stick to a budget or resist temptation than you expected.
Some people find success with using a cash-only system, which forces them to put their money away before they can spend it. Others prefer to set up automatic transfers from checking to savings accounts so that even if they forget about putting money aside, it happens anyway.
Make sacrifices.
It's easy to want to do whatever makes us happy. However, sometimes doing what we want isn't always best for our long-term goals. When it comes to financial challenges, this is especially true. To make better financial decisions, you'll need to learn to sacrifice something now to get ahead later.
For example, maybe you love to shop online, but you could save a lot of money by shopping locally. The same goes for eating out. You may be tempted to go out to eat three or four times a week, but if you bring your lunch to work every day, you can save hundreds of dollars per month.
Take a step back.
Sometimes, we try to take control of our lives by taking control of our finances. We become obsessed with tracking every penny, worrying about the future, and always thinking about what we don't have.
All of this can cause anxiety and stress, which ultimately leads to poor decision-making. Try to focus on living in the present moment. For example, if you want to get out of debt, start by paying your bills on time every month. Once that's done, you can move on to tackling your credit card balances.
At the end of the day, the most important thing to remember is that you're never going to solve all your problems at once. Instead, focus on one problem at a time until it's resolved. Then, move on to the next. Over time, you'll build a healthy relationship with money that will serve you well for years to come.
Conclusion
The New Year is a great time to think about your financial future. Whether you're looking forward to landing your first job, planning to attend college, or searching for a better way to manage your money, it's important to start early.
Start today by setting goals and making a plan to achieve them. And remember, no matter where you are starting, there's always room to grow. With a little bit of effort, you can make big changes for the better.
Happy New Year!