Financial Goals for 2023: Setting a Budget, Building an Emergency Fund, and More
By As we enter the New Year of 2023, many of us are looking for ways to become more financially secure. Whether it’s paying off debt, increasing savings, or investing for the future, setting financial goals and creating a plan to reach them is essential.
When it comes to personal finance planning, the first step is to define your financial goals. Everyone’s goals will be different, but it is important to know what they are in order to plan for the future.[0] Some goals may be relatively short-term, such as saving for a vacation or a vehicle, while others may be more long-term, such as paying off a mortgage or establishing a college fund.[0]
A budget is an important tool for achieving financial goals.[1] It is important to outline your income and expenses in order to make smart decisions about spending and reducing liabilities. Also, make sure your goals are reasonable and won’t cause added stress.[1] When looking to save, it is advisable to set a realistic goal that is within your budget and covers your usual expenses.[1]
When it comes to saving, experts recommend having an emergency fund that can support at least three to six months’ worth of living expenses.[0] In the event of a temporary loss of income, you can ensure that you have enough funds to cover your essential expenses until you regain your income.[2] Choose a sum that is suitable for you and your family, and put away a portion of your earnings each month until you reach it.[2]
One strategy for paying off debt is to use a balance transfer card with a 0% intro APR period.[3] You have the option to move the balance of an existing card to a new credit card, such as the Wells Fargo Reflect® Card or the Citi® Diamond Preferred® Card, and make payments without incurring interest for a certain amount of time.[3] You should be able to reduce your debt quicker with this, as your funds are being used to lower the principal and not the interest.[3]
If you are eligible to make deductible contributions to an IRA, you can save on 2022 taxes by contributing by April 18, 2023. If you are ineligible, you may want to consider investing in a Roth IRA, which has more lenient income requirements.[4] The contribution limit for IRAs in 2023 is $6,500 (or $7,500 if you are 50 years old or above), and it may be eligible for tax deduction depending on your income.
0. “4 Personal Finance Strategies for 2023” TechRound, 26 Jan. 2023, https://techround.co.uk/guides/4-personal-finance-strategies-for-2023
1. “Rekindle Your Fizzling Financial Resolutions | National | corydontimes.com” Corydon Times, 30 Jan. 2023, https://www.corydontimes.com/news/national/rekindle-your-fizzling-financial-resolutions/article_1d874c78-0d64-560d-b1f9-4b9cb0fbae23.html
2. “Financial Goal Examples for the New Year” AOL, 25 Jan. 2023, https://www.aol.com/finance/financial-goal-examples-161210884.html
3. “3 strategies to help give your finances a much-needed reboot this year, according to a financial expert” CNBC, 26 Jan. 2023, https://www.cnbc.com/select/strategies-for-financial-reboot-kristin-merrick
4. “A Financial Review in Early 2023 Can Optimize Your Strategy” Kiplinger's Personal Finance, 26 Jan. 2023, https://www.kiplinger.com/personal-finance/financial-review-early-in-the-year-optimizes-strategy
