As the New Year quickly approaches, many people are thinking about their financial goals for 2023. The list of elements to consider is wide-ranging, especially if a debt is involved, but worry not! There are debt relief programs to help you achieve stability.
Analyzing your retirement account, savings account, emergency fund, and insurance are all small steps in the right direction. And while it’s certainly important to save money for a rainy day, one element of your personal finances that should top the priority list is paying off credit card debt.
This goal is shared by millions when it comes to New Year’s resolutions, and for a good reason. High-interest rates and revolving interest charges make this type of debt nearly impossible to find relief from.
Let’s take a look at which ones might be right for you.
Review Your Overall Financial Situation
Taking a good look at your overall financial situation is the first step when organizing your finances for 2023.
Here are some examples of questions you should be asking yourself, along with a partner if you have one.
- What type of financial accounts do you have, savings, investments, or debts?
- What are the amounts of each type of account, and how do they compare with the previous year? And perhaps most important,
- What does your cash flow look like? Is there plenty left over after each payday, or are you stretching each dollar from day to day?
With inflation recently on the rise, more people are struggling financially to make it till the end of the week. If your own finances are this tight, it’s better to shovel money into savings for emergencies than investments.
So keep this in mind when you’re planning your savings goals for the New Year.
Review How You’ve Been Spending Money
Once you’ve reviewed your overall financial picture, it’s time to dive deeper into the details. How have you been spending money over the course of the past year? Are there certain areas you can cut back and redirect funds for creating wealth?
For example, even small items like streaming services can add up over the span of 12 months. If you’re paying $10 to $15 per month, that’s $120 to $180 per year for every service you have.
Could investments be a better use of these funds? Also, be honest about eating out, which is one of the most inefficient ways to spend money, especially if you rely on credit cards to pay for meals.
Prioritize Saving Money for Emergencies
When you’re trying to establish a more stable financial future, a key strategy is to create an emergency fund. Life happens, and sometimes that means your income could take a dip, or you could have sudden expenses pop up.
Auto repairs and broken-down systems in your house are just a couple of examples. Rather than putting these types of expenses on a credit card with high interest, it’s always better to be able to pay cash for expenses you didn’t expect.
There is a wide variety of accounts you could open to achieve financial stability through regular contributions. For example, simple savings account that’s linked to your checking account in your mobile banking app. These make it easy to contribute to your savings on a regular basis and track your progress.
You could also contribute to a health savings account through your employer to cover unexpected medical emergencies. These types of accounts also come with tax benefits, enabling you to leverage your dollars. Essentially, this equates to extra money that goes directly into your pocket.
Retirement Savings Investing
Saving for retirement is different than saving for emergencies because it involves investing. Depending on your age, this could be more or less of a priority for the New Year. However, the younger you are when you start to invest, the more wealth you’ll achieve later in life.
That’s because investing compounds your money, leveraging your income and savings to snowball with each passing year. By starting just a decade earlier, the difference in cash when you retire can literally be millions of dollars.
Today, there are tons of apps out there for investing, such as the Cash App. These make investing in stocks as simple as the tap of a button. Of course, this can be a bad thing if you choose the wrong stocks, so take the time to fully research the companies you invest in.
With this in mind, are you lucky enough to work for a company with a 401(K) plan that matches your contribution? If so, you’re far better off maxing out the amount you can contribute each paycheck into the 401(K) account before individual stock investing through apps on your phone.
Improve Your Financial Well-Being by Reducing Debt
There’s never been a more perfect time to focus on reducing debt. The interest rates on loans are likely to rise in the near future, so it’s better to pay off your debts now and start building your cash reserves. The stronger your financial position, the less you’ll be affected by economic trends like inflation.
However, many folks have found themselves trying to cope with increasing amounts of credit card debt. This puts a major strain on their budget, with little to no extra cash available for savings or investments.
If you’re in this type of situation, the good news is there are many programs available to alleviate your financial stress.
Take Control of Your Financial Future
When planning your financial future for the New Year, Alleviate Financial Solutions can lend a helping hand. From our debt settlement programs to numerous other options for debt relief, our seasoned debt experts can provide a plan for action.
Whether your best option is a debt management program, debt consolidation loan, or debt settlement program, our team members can help you take the first step on the path to financial freedom.
It’s possible to take control of your financial future in the New Year. To learn how you can become debt free in 2023, contact us at 800-308-2935 at Alleviate Financial Solutions today!