Planning for Financial Wellness in 2023

For most people, buying a home is one of the largest purchases they will make in their lifetime. Whether you are in the process of moving toward purchasing your first home or desire to sell your existing home and move to another in 2023, putting your finances in order before getting started is a wise first step. The beginning of a new year is a good time to reflect and examine what goals were met and what you could have done better.

Here we have some great steps to help plan for financial wellness in 2023:

Gather the Paperwork

Granted, your paperwork might live in digital format on your computer or in a cloud, but you will want to have easy access to various pieces of information such as your paystubs, bills, and receipts for groceries, electronics, home improvement, entertainment, etc. This is the heart of your financial wellness in 2023 as you will examine exactly what funds are coming in and how much money is going out.

Update Your W-4 for 2023 (if necessary)

It’s quite possible that somewhere along the way, a mistake was made and you have not been receiving your correct pay or the tax withholdings and deductions are wrong on your paystub. It is also a good time to review and make adjustments to the dependents claimed on your tax return. Review your current W-4 and update it so you can start 2023 on fresh footing.

Review Your Spending

In reality, nobody wants to examine their spending habits too closely for fear of the realization that they are spending too much. However, if you are committed to creating and meeting strong financial goals for 2023 (such as purchasing a new home) then this step can’t be glossed over.

Review your bank and credit card statements and separate your spending into categories. Some items will be necessities such as utilities and fuel; others should fall neatly into food, entertainment, and clothing; while further items may be extravagances such as travel, treats, or hobbies. Remember to include all monthly bills such as insurance, mortgage, car payments, etc.

You might run across expenditures you have forgotten about, memberships and subscriptions that you don’t use or need. Now is a good time to eliminate them.

Take a Look at Your Auto Billing

Auto billing can be helpful, you don’t have to worry about paying late or getting charged fees for late payment, but it can also prove tricky sometimes. Companies might increase their monthly charges without you fully being aware of it, and you suddenly realize you’re paying more than you thought. Organizing your auto billings will help  you to be certain they are at the price points they should be.

Save Save Save

Living from paycheck to paycheck is surviving, it isn’t thriving. If you want to thrive financially in 2023, redirect your cash flow – about 5-10% of your gross income – into a savings account. If you’re able to, get direct deposit and have a percentage funneled directly into savings. Don’t get an ATM card for this account; allow it to sit without getting dipped into.

Pay Off Credit Cards

Paying interest rates of 20% and above is not going to get you ahead of the game. Pay off your credit cards as quickly as possible. Once a card is paid off, celebrate, then freeze it in a block of ice, so you really give consideration to the next time you use it, and move onto the next easiest balance to pay off. When you do use them, pay off the balance every month. Credit card debt is pernicious and works against financial wellness.

What are Your 2023 Financial Goals?

Whether you would like to purchase a home in Northern California, are thinking about going back to school, or perhaps even planning for retirement, having goals will keep your finances organized. While you’re here, what were your 2022 financial goals? Did you meet them? Where could you have done better? Not sticking to a budget, impulse spending, and failing to prioritize regular saving habits often cause people to fall short of their goals.

Write down your 2023 financial goals. Use the SMART goal method to reach these milestones:

S – Be specific about what you are planning for (for example, a rainy day fund or retirement savings)
M – The goal must be measurable and have a dollar amount associated with it
A – Make your goal actionable by determining by setting small milestones to accomplish along the way to your greater goal
R – Is this goal realistic? Going into space may sound like fun, but is it really your top priority.
T – For you to succeed in saving for this goal, you must stick to the timeline you have created

Planning for financial wellness is no easy task. It requires examining your habits, patterns, and goals for the future. Changing old habits and patterns that no longer serve your good financial health are well worth the effort.