6 Personal Finance Resolutions for 2023
Do you find yourself making the same New Year’s resolution year after year, to improve your financial situation? Maybe the problem is that your goal is too broad; it’s not well-defined. By making more specific resolutions, you can take the steps you need to reach your goal.
To help you finally achieve your financial goals, we’ve created a specific list of 6 personal finance resolutions for 2023.
Build or improve your credit score
A credit score is an essential part of US personal finance. Without a score, renting an apartment and being approved for a credit card or mortgage can be tough. If your credit score isn’t high enough, it can be tough to do those things as well, and if you are approved, your interest rates will be higher than the rates offered to consumers with better scores.
If you need to build or improve your credit score, Upwardli can help! Get pre-approved instantly with no credit check or deposit. Each account includes an unsecured line of credit that will help you build credit fast!
2. Create (or stick to) a budget
A budget is critical for financial health because it provides critical information; how much money is coming in, how much is going out, and where it’s going. If you don’t have a budget, you do not have control of your finances.
So create a budget on easy mode. Use Mint, a free budgeting program that does most of the work for you. And divide your budget using the 50/30/20 method, simple and straightforward!
If you have tried and failed to stick to a budget in the past, try an envelope budget. Each week you take out the amount of cash you have budgeted for categories like food, entertainment, clothing, etc., the categories we tend to overspend in. Write each of these spending categories on an envelope and put the money allotted to each category into its envelope. When an envelope is empty, you’re done spending in that category for the week.
3. Create an emergency fund
An emergency fund is one of the best tools available to protect your financial life. An emergency fund is money set aside in case of an urgent, unexpected expense like a car or home repair, a medical bill, or a period of unemployment.
Ideally, your emergency fund will contain enough money to cover three to nine months’ worth of essential expenses like housing, utilities, groceries, transportation, and insurance. That’s a tall order, but creating an emergency fund of $1,000 is a reasonable first step and will see you through many of the kinds of expenses considered emergencies.
4. Kill high-interest debt
Not all debt is necessarily “bad” debt. Debt like a mortgage or student loan generally has relatively low-interest rates, and you have something to show for that debt, a home, and an education.
But high-interest debt like credit cards or payday loans is bad debt because of their high-interest rates. This kind of debt makes it difficult to achieve your financial goals, like saving for a home and investing for retirement. If you have high-interest debt, make paying it off your priority.
5. Start investing
Saving money is not enough. If you want to grow your wealth, you must start investing; the earlier, the better. A lot of money is not the secret to investing; the secret ingredient is time, allowing your investments to grow and compound for years.
You don’t have to be an expert in the stock market or have a big pile of money to start investing. An ETF like Betterment is a great, low-effort way to invest. The same is true of a 401(k), an investment account some employers offer.
6. Increase your income
The average person spends around three hours a day watching TV. Make better use of some of those hours by finding a second income stream. There are so many options:
Babysitting
Pet sitting or dog walking
Lawn mowing
Leaf raking
Snow shoveling
Selling crafts online
Gig economy jobs like Uber, Uber Eats, Instacart, Task Rabbit
Freelancing sites like Upwork and Fivver
Online tutoring
You don’t have to make a ton of money with a side gig, but every dollar you make is a dollar that you can put towards one of your financial goals and gives you at least some income in the event of a job loss.
This is your year!
As the year comes to a close, think about what you want for the following year. Reaching these financial goals isn’t always easy, but the payoff is so worth it! Let the New Year be the year you make your resolutions stick so you can create the life you want.