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How to Make Financial New Year’s Resolutions You Can Keep



It’s a new year – which means it’s time to think about new financial resolutions.

Some of us may have achieved our 2022 financial goals with time to spare. The rest of us — well, let’s just say we’re considering making the exact same New Year’s resolution in 2023.

2022 may have had its economic ups and downs—foods went up, inventories went down—and some of this uncertainty may have made it difficult to stick to certain types of financial decisions. However, it is possible to set financial goals and continue working towards them regardless of what the next year brings.

“As the saying goes, if you shoot for the stars and only reach the moon, you̵

7;ve still come an awful long way,” explains LendingTree chief credit analyst Matt Schulz.

If you’re trying to figure out how to make a financial solution that you can actually stick with, you’re in the right place. We asked three financial experts what kind of realistic goals you should set, how to tell a good financial solution from a bad one, and what to do when life gets in the way of your financial plan.

What makes a good financial solution?

“A good financial solution will be one that is well-defined and broken down into easy-to-follow steps,” says Steffa Mantilla, Certified Financial Education Instructor (CFEI) and founder of Money Tamer. “If you don’t break your financial goal down into steps on how to achieve them, you’re unlikely to work toward the goal or feel lost trying to complete it.”

Mantilla suggests using the SMART goal approach to create financial solutions that are specific, measurable, achievable, realistic and time-based. For example, if you want to save more money in 2023, here’s how you would make that resolution a SMART goal:

  • Specifically: Turn “I want to save more money” into “I want to save $500 every month.”
  • Measurable: Track how much money you add to your savings account each month.
  • Actionable: Create a system that allows you to save $500 each month, such as setting up an automatic transfer system that withdraws $115 from your checking account every Friday.
  • Realistic: If you can’t save $500 each month without making dramatic changes to your current lifestyle, you may want to reduce your long-term financial savings goal. (Cutting a subscription or two is a sustainable lifestyle change; cutting your entertainment budget to $0 is not.)
  • Time-based: Every 30 days, try to add another $500 to your savings account – even if you need to withdraw your savings during the year to cover an emergency expense.

If the SMART goal approach feels overwhelming or overly complicated, don’t worry. Not all of our experts agree with this type of financial planning.

“I actually believe in jumping in and then figuring it out in a lot of cases,” says Schulz. “Many may disagree, but I think excessive planning and analysis at the beginning often prevents people from even getting started.”

Schulz suggests taking a more holistic approach to financial solutions. If you want to save more money in 2023, you don’t need to set a monthly savings goal that you may not always reach. All you really need to do is get into the habit of putting extra money into your savings account – whether it’s $10 or $100. “Once you’re in that habit, you can figure out what to do in the long run.”

Jim Wang, founder of WalletHacks, doesn’t like the concept of New Year’s resolutions — including financial ones. “I feel like a New Year’s resolution can put too much pressure and weight on the goal,” he told us.

Wang’s experience is that many people set resolutions that are either too modest or too ambitious. “You may not be willing to set an aggressive solution for fear of failure,” Wang explains, “or you set one so aggressively that you fail quickly.”

Wang suggests asking yourself how you want your life to change in 2023 — and planning your finances accordingly.

“What do you hope to accomplish this year that will make your life better? Do you want to retire earlier? Do you want to take a vacation? Let your wants and needs dictate what resolutions you set.”

What kind of financial decisions should you make?

When it comes to choosing your financial resolutions for 2023, our experts know exactly where to start. “If you don’t have an emergency fund or the one you have is too small, that’s where you should start,” says Schulz.

Having an emergency fund in place will help you no matter what happens in 2023 – inflation, a recession or an unexpected financial emergency. Saving an emergency fund can also help you avoid taking on new debt, especially high-interest credit card debt that can be difficult to pay off.

“The two best things you can do for your personal finances are to have an emergency fund of at least three months’ worth of expenses and to pay off your debt,” explains Mantilla. “Once you’re debt-free and have an emergency fund, you can make decisions to increase your net worth, like investing or learning about rental properties — but you can’t move forward toward other monetary goals if they’re built on a shaky foundation.”

By deciding to save more money or pay off your debt, you’ll be able to take positive action today that can help you achieve your long-term or short-term goals—no matter how long it takes. “Getting debt-free this year may not be possible,” Wang explains, “but by putting it down on paper, you’re sharing that you’re committed to that outcome.”

Financial decisions to consider for 2023

In addition to saving more money and paying off your debt, there are some specific financial goals you may want to consider for 2023.

Start by adjusting your budget to accommodate higher food prices and other costs that increase with inflation. “When you increase your budget for items you think will be more expensive, you give yourself breathing room for when prices go up,” explains Wang. “And if they don’t, you have extra savings.”

Then prepare your finances for a potential recession. If you’re worried about losing your job, for example, update your resume or grab a side hustle.

If you’re worried about rising prices, learn how to cook cheap meals at home — or teach your kids some important kitchen skills. Set your family’s expectations ahead of time, so they know they’re ready for cheap vacations, haircuts at home, and other money-saving maneuvers.

Finally, resolve to prioritize your health and wellness in 2023. This may not sound like a financial solution, but keep in mind that stress can lead to impulse buys, unnecessary indulgences, and other budget-busting mistakes.

The more you can pay attention—even in another uncertain year—the more money you might be able to save.

How can you make financial decisions in uncertain times?

The past few years have shown us that anything can happen – which means you should be prepared for life to get in the way of your financial plan. However, that doesn’t mean you should stop trying to achieve your goals.

“I think it’s good to have something you’re working towards,” says Wang, “even if that goal is months or even years away.”

One of the best financial goals to work toward is a well-stocked savings account. “The pandemic has clearly shown us how important these rainy day savings are,” says Schulz. “We simply have no earthly idea what the future holds for any of us, so all we can do is prepare the best we can to protect our family when tough times come.”

There are many ways to protect your family and prepare them for a solid financial future, including opening a 529 plan for your children, creating a revocable living trust, and purchasing affordable life insurance.

Mantilla has another option to add to your list – although it may take some major life changes to achieve.

“If you live in a two-income household, one of the best things you can do financially is to restructure your life so that your family can survive on just one income,” explains Mantilla. “If a person loses their job unexpectedly, you still have the other income to live on and savings to use until that person gets a job again.”

Mantilla notes that living on a single income may not work for all households. “Living on one income isn’t the easiest thing and can involve making tough decisions like moving to a lower cost of living area and trading in your cars,” she says. “In the long run, though, you’ll feel a lot less stressed when you know you and your family are financially secure and can handle most things thrown at you.”

The most important thing to know about financial decisions

No matter what kind of financial decisions you make in 2023—SMART goals, holistic goals, or goals that require major life changes—choose decisions you actually want to work toward that will set you up for financial success. For example, if you’re not that interested in buying a home, you won’t be motivated to save for a down payment. On the other hand, you may be motivated to put money away in the hope that you can start a small business or retire early.

Once you’ve chosen a goal that works for you, keep working toward your goal—no matter what. If you can only save $50 a month instead of $500, that’s great. If you have to put your student loans into forbearance after an unexpected job loss, that’s fine. As soon as your financial situation improves, start saving more money, putting more money towards your debt, investing more money in your retirement account or setting aside money for that dream vacation.

“Even if you set an outlandish goal, if you consistently work toward it, by the end of the year, you might have completed 50 percent of it,” says Mantilla. “Maybe even more. It’s still a lot better than most. You’re now further towards your ultimate goal than you would have been if you hadn’t set the goal in the first place.”


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