2023 is fast approaching and most people haven’t planned for their financial needs for the new year.
Successful money management is about planning and then execution – just like any business, really.
So here are the top 6 things you should do now to get your finances in order for the new year.
6 Things to Do to Get your Personal Finances in Order for 2023
#1. Set your financial goals
When you know your destination, then you can figure out how to get there, but if you don’t know where you’re going, you’ll just get lost along the way. It’s the same with money.
Start 2023 strong by setting very clear yearly, monthly, weekly and daily financial goals. We even have a printable to help you with this.
You can then devise a plan of action for how to achieve these.
For example, your yearly goal might be to get rid of your car debt which means that you may need to cut your spending on a monthly basis by a certain % and you may want to do some daily or weekly savings challenges in addition.
#2. Set or revisit your monthly budget
If you haven’t started budgeting yet, now is the time. The easiest way to do this is to first track your expenses for at least a month so you know what your recurring bills and financial commitments are. Then you can start thinking about where you really want to put your money and where to cut – you might be overspending on your shopping for example without even realising it.
A monthly budget doesn’t have to be a strict black and white rule but it serves as a great guidance and a planning tool that keeps you accountable.
If you have been budgeting for a while, it’s good to revisit it considering your new goals for next year and adjust where needed to ensure you hit them.
#3. Plan your irregular expenses
In addition to your usual monthly commitments, you have payments or expenses that you need to make at certain times during the year.
For example, your taxes or your car service. It’s always good to write these down and plan for them as soon as you can.
We pay homeowner tax every year in April so we set aside a bit more money for this in the first few months of the year.
#4. Plan your sinking funds
As you plan your irregular expenses, think about how much you would like to spend for things like travel, shopping, socials etc. so you can decide how much you’d like to have in your sinking funds to tap into when you want and not stress out about going above your monthly budget.
This ensures that you continue to have fun and you’re not limiting yourself all the time. Living frugally is different to sacrificing every cent and not enjoying life. You only live once so you should find the best way to balance commitments and fun.
#5. Put a focus on your emergency fund
Many say we’ve entered a recession and we’ve had a few rough years since COVID-19 with rising inflation, energy crisis etc.
It’s not a bad idea to make sure you have your emergency fund of 3-6 months worth of living expenses complete or even beef it up to go up to 9 months if you’re worried.
This safety net gives you peace of mind that if an unexpected situation like a job loss, a big car problem etc. you will have the money to fall back on.
#6. Invest in your growth
Never forget that the most important investment you will ever make is an investment in yourself.
So think about your overall life goals and what you might be able to do in 2023 to help you achieve them.
Perhaps you want to reskill so maybe an education course is what you should be aiming for next year. Or you want to start a business so you may need to figure out how to do it and how to put the time into it.
Whatever it is, never forget that investing in your personal growth is always a good money decision.
How do you plan to get your finances in order for 2023?
BONUS: And if you need a tool to help you with all this planning, here’s our ultimate 2023 Financial Planner for grabs at 30% off until the end of the year.