6 Tactics to Strengthen Your Financial Position Before 2023

As we leave 2022 behind, which was tough on the wallet with inflation, high interest rates, rising oil prices, and an economic slowdown on the horizon, now is the perfect time to sort out your finances for 2023. Even with all these financial challenges, you can still find smart ways to boost your economic health.

As the year wraps up, let’s make sure we’re ready for the upcoming year by getting our finances in order. Start by organizing your financial documents—keep what’s important and toss what you don’t need. This can set you up for a solid financial start in 2023.

Here are six practical tips to sharpen your financial situation as the new year approaches. Take some time to look at the big picture of your finances and create a path to prosperity in 2023.

1. CREATE A BUDGET FOR 2023
A well-planned budget is crucial for financial success. It helps you manage unexpected expenses throughout the year. Since budgeting isn’t one-size-fits-all, create a system that works for you, like a spreadsheet or an app. Apps like Quicken and Mint can help manage bills, credit cards, and savings.

2. SET YOUR FINANCIAL GOALS
Knowing what you want financially can motivate you to reach your goals. Think about what financial milestones you want to hit. Do you want to pay off student loans, plan a vacation, or stop living paycheck to paycheck? Understanding your goals is important for managing your expenses and income.

3. PLAN TO PAY OFF DEBT
Debt can be helpful or harmful, depending on how it’s used. You need some debt for big purchases like a house, but it’s problematic when it becomes a burden. A 2022 survey showed that over 31% of U.S. adults have more than $1,000 in credit card debt. Develop a plan to pay off loans and mortgages gradually. Reduce debt to free up money for saving and investing, and avoid new debts until you have a repayment habit.

4. CANCEL UNUSED SUBSCRIPTIONS
Subscriptions can easily pile up with enticing offers. Review what you’re subscribed to and cut out what you don’t need. Keep subscriptions for essential services like security or antivirus and categorize others as “wants” or “needs.”

5. SAVE CONSISTENTLY EACH MONTH
Your budget should include a plan for regular savings or building an emergency fund. Boosting your 401(k) or setting automatic transfers to a high-yield savings account can help, along with cutting unnecessary spending.

6. SPEND LESS THAN YOU EARN
It might sound simple, but sticking to this fundamental rule is essential. Start by understanding your monthly cash flow—knowing your income sources and fixed and variable expenses. Once you have that figured out, look for areas where you can cut back on spending.

With inflation still a concern, 2023 is a year to focus on saving and cutting expenses. It’s a great time to strengthen your financial standing for the New Year. Be cautious with setting too many or unrealistic financial goals to avoid getting discouraged.

Whether 2023 is about growing financially or increasing savings, these practical tips can give you an advantage. It might be helpful to keep a checklist to track your progress and make necessary adjustments over time.