Smart Money Moves To Make In 2023
Today we're discussing the smartest money moves you can make in 2023. These strategies can help you achieve your financial goals and build a strong foundation for your future.
1) First up, create a budget.
Or refresh your current one. This is an essential step in managing your money. By tracking your income and expenses, you can understand where your money is going and identify areas where you can cut back and redirect those funds to something else. Also, take some time to reflect and assess if your money is going to the things you value. Don’t be afraid to make changes if it’s not!
2) Replenish your emergency account.
It's the beginning of a new year and you may have dipped into your savings for some unexpected expenses last year. Aim to have enough to cover three to six months' worth of living expenses in a liquid account that you can access easily. *Pro tip: When calculating your living expenses for your emergency fund, don’t count things like daycare costs. You won’t need to pay for that if you lose your job!
3) Pay off high interest debt.
If you have high-interest debt, such as credit card debt, it can be smart to prioritize paying this off as quickly as possible. The longer you carry this debt, the more it will cost you in the long run.
4) Max out your 401K employer match.
If you have a 401k with an employer match, make sure you’re saving enough into your 401K to get the full match over the course of the year. Many times, this is an immediate 100% return on your money, the highest rate of return of any financial move you will make all year!
5) Automate your investment savings strategy.
Set up automatic contributions from your checking account to your investment account each month so that you don’t have to worry about it. Don’t forget to invest the cash you put in your investment account! What should you invest in? Glad you asked…
6) Invest in a globally diversified portfolio.
Consider building a globally diversified portfolio made up of an allocation of stocks, bonds, and real estate depending on your goals and time horizon. Research shows that the more things you own in the market, the more predictable your returns will be over the long run. Don’t worry about chasing the highest return in the short term. Prioritize a strategy with a high likelihood of predictable outcomes. This will allow you to be consistent with an investment plan and hit your goals.
7) Get adequate insurance coverage.
Make sure you have adequate insurance coverage to protect your assets in case of unexpected events, such as a natural disaster or illness. This can help you avoid financial hardship. Also, shop your existing insurance coverages every 6-12 months to ensure you’re getting the best available rates in the current market.
By following these tips and continually evaluating your finances as things change, you can make smart money moves that can help you achieve your financial goals in 2023 and beyond.
If you have questions on any of these topics, or would like to talk about how you are invested, schedule a time to chat with us at Redeem Wealth. We’d love to make sure you are set up for success as an investor, and taking the steps that matter most in reaching your goals.
