Financial Fitness: Six Tips for 2023
The new year is here and your resolutions are probably well underway. While you have may set goals to get more physically fit, it is also important to consider your financial fitness going into the new year as well. If your finances are not where you want them to be, or maybe they are in need of a little tune-up, consider the six tips below to get your financial health fit this year as well.
1. Trim the Fat
One of the first steps toward a more healthy financial future is spending less. If you take the time to take a hard look at your budget, odds are you can find some excess that you can easily trim off without feeling the pinch. Start with spending items such as clothing, groceries, and entertainment and see if smart shopping or more date nights at home can help free up some extra money each month. Next, look at your utility bills and find ways that can reduce them. Start with your non-essentials such as cable and phone. Do you really need the extra movie channels and data? When was the last time you shopped around to price compare? Finally, discipline yourself to follow good energy saving tips to reduce the overall cost of your energy bills.
2. Tone Up Your Debt
Odds are the holidays have increased your credit card bills. Don’t let that debt snowball higher than it needs to with accruing interest. Start with your highest interest rate card and set a larger payment in your budget to begin lessening that total. Once it is paid off, use that same payment to start tackling your next high-interest debt ball and so on. A critical thing to remember is that when paying only your minimum payment, it will take you ten years and a significant amount of interest to pay off your card so always pay more than the minimum if you are looking to pay off debt.
3. Whip Your Credit Into Shape
Your credit score can affect you in many aspects of your financial life. Whether you are looking to buy a house, a car, or to take out a loan to start a business, your credit score will be used to determine how much interest you will pay and how likely you are to even get your funds. Unfortunately, many people neglect their score until they need it, and at that point, it can be difficult to improve in enough time. Keep your credit card balance far from the limits, be sure to make payments on time, and monitor your score for negative marks.
4. Load Up of Savings
Once you have trimmed the fat off your budget, you will want to put some of that into savings. One thing to start saving for immediately is an emergency fund. Surprise repairs, medical bills, and layoffs can damage your financial health if you are not prepared for them. Having this fund available for these times can lessen the blow and help you stay on top of your bills, so you don’t fall behind.
5. Put Retirement Savings in Your Routine
Saving for retirement is critical so that you can retire. Many people do not save enough for their retirement or wait so long that it stresses their budget to meet their goals. Make it a point this year to focus on your retirement goals and find extra funds that you can put into your account so that it has the necessary time to grow as it should. Find out if your company matches contributions and if so try to put in as close to how much they will match as possible.
6. Start a New Investing Routine
Investing is the quickest way to grow your wealth, but many people are afraid to enter the world of investing because they are afraid of losing their money. Others are under the misconception that you have to invest a lot of money when the truth is you can begin your investment journey with as little as $100. Start small so you can get the hang of it and if you have more money to invest consider meeting with a financial advisor who can help you pick a mix of funds based on your risk tolerance.
Get your finances healthy this year and set attainable goals to help you grow your wealth and get started on a secure financial future.