6 Most Important New Year Money Resolutions That Will Get Your Finances On Track
Have you yet considered making New Year money resolutions? If not, now is an excellent moment to begin. According to a recent survey, over 27% of American adults indicate that their main financial objective for this year is to save more money. 23% of people intend to pay off their debt, and 23% wish to increase their income.
What Financial Actions Should You Take This Year To Accomplish Your Goals?
If you want to get your finances in order this year, check out these top new year money resolutions that financial experts suggest you should make to get your finances on track.
6 Most Important New Year Money Resolutions To Get Your Finances on Track for This Year
1. Set a Budget To Achieve Your Goals
Hoping to save enough for a big purchase next year? Your first new year money resolutions to make is to set a budget to achieve your goals for next year. TalkFinance24 found that over 40% of adults are planning to buy a car this year, more than 26% expect to take an expensive vacation and around 24% would like to buy a home.
To reach your savings goal, though, you’ll need a budget. Creating and sticking to a budget throughout the year can help you stay on track with your savings and avoid overspending.
It doesn’t matter if you follow a cash-stuffing approach, use an app, or just put it down on paper. You just need to have the best new year money resolutions for the year, that’s a plan for your money each month. Your first month of budgeting won’t be perfect, but the key is to keep at it and keep making improvements.
2. Pay Off Your High-Interest Debt
Many financial experts will tell you that, although not all debt is harmful, high-interest debt can quickly put a strain on your finances. According to a 2022 expert survey, over 31% of American adults have more than $1,000 in credit card debt. This is a more reasonably, why you need to consider paying off your high interest debt as one of the best new year money resolutions for the year.
Paying off these debts can free you to invest, save and enjoy more of your money. Start by making sure you understand all the terms and conditions of your current loans. Try to make this a habit before taking on any new debts, too.
Many people don’t understand the terms of their credit cards, bank accounts, loans, or cash advances. Know what you’re getting yourself into and whether it’s going to help or hurt your financial situation.
3. Contribute To a Retirement Account
Are you contributing to a 401(k) or have access to it? Are you contributing to an IRA?. Are you actually thinking about retirement? If no, make it one of your new year money resolutions.
Start contributing to a retirement account now rather than later. Even if you can only contribute a small amount at first, starting early gives compound interest time to work in your favor.
4. Build an Emergency Fund If You Don’t Have One Yet
What will will You do to contain unforseen circumstances? Do you have emergency fund put aside? Make it one of your new year money resolutions this time. You need to know if you can pay your medical bills and living expenses when the unexpected happens to your current job. Do you have money available in case of an emergency or job loss?
We found that over 22% of people who had a financial emergency this year had to pay for it with a credit card, and another 11% borrowed from a friend or family member to cover the expense. In light of recent economic troubles, it’s a good idea to make building an emergency fund one of your top financial priorities in 2023.
Many financial experts recommend saving six months’ worth of living expenses. But if that’s not realistic for you, start with $500 or $1,000. As long as you’re putting money toward this fund each month, you’re headed in the right direction.
5. Prepare Your Tax Return Early(For Businesses)
Don’t wait until March to start preparing your last year tax return. If you work with an accountant or CPA, get in touch with them as soon as possible to look at how much money you made this year, how much you paid in taxes and how much you can deduct.
This is especially important for business owners or self-employed freelancers. You may find you need to make another estimated tax payment, or you may want to increase your charitable giving before the end of the year.
6. Consider Making Roth Conversions
One of the most important new year money resolutions you should make is to consider making Roth conversion. If you have a traditional IRA, you may have lost money this year with how turbulent the market has been. In that case, consider making a Roth conversion so that you won’t have to pay taxes on gains when the market bounces back.
A Roth conversion is when you take money out of a traditional IRA or 401(k) that you haven’t paid taxes on yet, pay taxes on the withdrawal, and move the money to a Roth account, where it can grow tax free until you retire.
To make good money resolutions, you need to consider these most important monetary moves that can actually help you redefine your financial future. Setting up a budget to achieve your goals, paying off high-interest debt, contributing to your retirement savings, getting an emergency fund are the most essential decisions to take in order to get your finances on track for the years ahead.
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