Can you believe that 2023 is just weeks away? While it may be wise to take care of some year-end financial tasks if you haven’t already, now is also the time to start considering the future. This is where the tried-and-true new year’s resolution comes into play! It can be tempting to make lofty goals when you have a whole year ahead to tackle them, but be careful: over 80% of new year’s resolutions end in failure. It’s one thing to dream big, but putting words into action is something different entirely.
If your goal is to become more financially secure in 2023, there are plenty of ways to avoid becoming part of that 80%. Here are steps you can take to get started:
Pay Down Debt
The average American household is $96,371 in debt. Making minimum payments alone on your outstanding debt can result in years of additional fees, using money better spent elsewhere. If you want to get serious about your finances in 2023, addressing your debt is the perfect way to start.
One strategy for tackling debt is the “avalanche method.” Make up a list of all of your loans, credit card balances, and other debts. Then, determine which one to prioritize based on whichever has the highest interest rate. After all, such interest rates will cost you the most over time. The sooner you eliminate them, the more manageable your overall debt will become. On top of that, you will also receive other benefits, such as improving your credit score. An improved score will net you better rates on future loans, insurance, and more – thus saving you even more money over time!
Invest Your Money
Just as important as managing your current finances is thinking towards the future. Once you have your debt under control, it’s time to put your money to work! Despite headlines railing about uncertain markets, it is almost always worth it to invest your money rather than simply leaving it in a savings account. With the help of a trusted financial advisor, you can create an investment portfolio suited towards your needs.
You should also consider other forms of investing beyond the stock market. When it comes to building a retirement fund, don’t stop at contributing to your employer-sponsored retirement accounts. Options such as fixed index annuities offer stable, long-term growth that can allow you to be more flexible with the rest of your investments. If one of your goals is income planning with tax efficiency, then other investment options are a must.
Review Your Beneficiaries
If you have done your diligence in paying off debt and building up your investments, it’s only natural that you would want to ensure that the fruits of your labor fall into the right hands after you’re gone. While this step may not feel relevant to your immediate future, reviewing your beneficiaries is a vital part of financial management.
Be sure to review the beneficiaries of your savings accounts, retirement accounts, life insurance policies, and any other financial entities. A change in marital or parental status, for example, may prompt you to list different names. Keep in mind that even if you note such changes in your will, beneficiaries take precedence, meaning it is essential that you keep them up-to-date. Don’t let your financial legacy devolve into a familial headache!
Feeling a bit overwhelmed? Don’t give up before 2023 has even begun! Here at Cowen Tax Advisory Group, we have over 44 years of financial planning experience. We can help you reach your upcoming year’s financial goals – and for many years after. Schedule a free consultation today!
Lindsey Restelli
lindsey@cowentaxgroup.com
As Cowen Tax Advisory Group’s Digital Marketing Assistant, Lindsey provides in-house copywriting and manages the company’s electronic records system, email marketing, and blog.
