A new year brings a sense of new beginnings and a fresh start. Have you checked in with your finances lately? With 2022 in the past, it’s an ideal time to see how the year affected your finances. Were there unexpected expenses you had to pay for? Are you still on track for retirement? Are you properly planning for short-term and long-term financial goals? There are many things to take into consideration when you’re reviewing and preparing your finances for the year ahead.
Here are six financial areas to consider reviewing for 2023.
1. Emergency savings fund
Did you need to dip into your emergency savings fund last year? The start of a new year is a good time to review what expenses came out of your account and to work on developing a plan to replenish those funds. With the price of goods and services still inflated, saving at least three to six months of living expenses is ideal for any circumstances where you don’t have a steady income, or you need access to cash quickly.
Learn more: Starting Your Emergency Savings Fund
2. Retirement goals
You’re one year closer to retirement, making it an ideal time to review your savings from the previous year and to make any adjustments needed for the upcoming year. Consider what you’d like your lifestyle to look like in retirement and determine if your savings strategy needs to be adjusted. When you work with a Wealth Management Advisor, you’ll get the assistance you need to develop a tailored plan to meet your retirement goals and ensure you’re still on track.
3. Budgeting
What are you budgeting for in 2023? A new car, home, or a vacation? It’s important to adjust your budget appropriately for the year ahead so you aren’t unexpectedly short on cash when you need it. Consider any large purchases you’ll be making this year and determine how much you need to put aside each paycheck to meet that financial goal. Recent reports indicate that all food prices are expected to increase between 3% and 4% in 2023, making it even more critical that you budget your finances accordingly for the year.
4. Establishing a will
One other thing to consider is to establish a will. This is a legal document that allows you to identify who will receive your belongings when you pass away. This can help streamline processes and protect inheritance for those established in your estate. If there is no will established at the time of your passing, the state will decide who receives your property.
5. Paying down your debt
Did you need to use your credit card for a large purchase or holiday shopping? January is a great time to review how much you need to pay off and establish a plan to help you pay it off early. The earlier you pay off the remaining amount, the less you’ll pay in interest.
6. Reviewing your portfolio
Has it been a while since you’ve had your portfolio reviewed? A portfolio review is a great way to get feedback on your current investment strategy. You’ll be able to learn more about the quality of your investments, confirm that your goals, objectives, and risk tolerance align, as well as see alternatives that could better support your objectives.
The beginning of a new year is an ideal time to check in with your finances from the previous year and plan for the new year. Between inflation rising the price of goods and services and stock market volatility in 2022, it’s ideal to make sure your finances are on track for this year. For more information on how First Bank can help your family with their financial goals, contact a trusted First Bank advisor today.