Save more, spend less, and pay down debt — this sensible trio makes up some of the most popular New Year’s resolutions people make every year. Unfortunately, they also happen to be some of the hardest financial goals to achieve.

Getting your finances in order is tough most of the time, but it’s especially challenging this year. Inflation is still higher than normal, and RBC is warning a recession may be in the books.

These economic factors are both barriers and incentives to managing your money better. To help you achieve your financial goals, here are some smart moves you can make in 2023.

Save $1,000 in Your Emergency Fund

An emergency fund is one of the most important things you can have. It’s a backup when life throws you a nasty curveball with a steep price tag attached. With enough savings in this fund, you can handle an unpredictable expense without upsetting the rest of your budget.

The thing is, it’s easy to get overwhelmed by the emergency fund’s prescribed size. Most advisors suggest you save three to six months of living expenses — that’s an overwhelming goal when you’re starting from scratch.

If you’re building your emergency fund from zero, don’t worry about six months yet. Focus on what you can do to save your first $1,000.

You don’t have to come up with this all at once. Instead, look to your budget to cut small expenses and set an automatic transfer to your savings.

Let Credit Take a Back Seat in the New Year

If you relied on credit cards and a line of credit to holly your jolly in December, you wouldn’t be the only one. Plenty of shoppers spread the cost of gifts and travel across credit cards and personal loans.

If you have plans to pay this merrymaking back, consider sidelining your line of credit and credit cards while you do it. Removing these temptations will help you avoid adding to the debt you already have.

Once you successfully pay off your balances to zero, be careful how you reintroduce these accounts into your finances. A lender like Fora recommends using a line of credit only in unexpected emergencies — like when you have to repair your transmission before you build up a sufficient emergency fund.

If your emergency fund falls short of the next unexpected expense, you can learn more about how a Line of Credit from Fora works in these situations. Until then, work hard to avoid borrowing a line of credit or personal loan when you don’t need it.

Get Familiar with Your Budget

All this talk about paying debt might have you wondering how, exactly, you can achieve this monumental goal. It gets easier when you have a budget.

A budget gives you a bird’s eye view of your average cash flow, so you can see how much money you typically earn and spend in a month.

Tracking your expenses this way can highlight some of your worst habits: that Stitcher Premium you forget to cancel, all those late fines from missed payments, or the fact you spent $2,000 last year on pizza alone.

Use these insights into your spending to find expenses you can cut. Any expense you can reduce or eliminate frees up cash that can go towards paying off a line of credit or building your emergency fund.

Bottom Line

Achieving financial goals can be challenging, but it’s easier when you follow these three tips. Good luck!

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