When it comes to your finances, it’s not too early to start planning for the new year.
A question you can ask yourself: How did your finances improve this year, and how can you make them better in 2023? Planning doesn’t take much time, and your goals should be simple. Focus on what you can best accomplish with the help of our free Get Beyond Money service.
The first step forward starts with a look back: Are you in better financial shape now than you were at the start of 2022? Comparing your savings and checking account balances at Tropical Financial is useful; however, you want to do more:
By how much did you reduce your debts? Those monthly car loan and mortgage payments improved your finances and, with on-time remittances, raised your credit rating. A big question that’s key to your 2023 plan: Are you carrying lower credit-card balances now than in February?
How much did you contribute to your retirement accounts? Look at the dollar amounts in your IRS or 401(k), not the current balances because securities prices are in flux. The dollars socked away this year will help you save on taxes now and make your retirement more secure.
With a good idea of how your financial situation changed this year, let’s plan for 2023. Here are three goals to consider:
- Cut your debts. Refinancing a car loan can save you hundreds, even thousands of dollars in interest, and reduce the number of payments. A debt consolidation loan can also slash your costs by paying off credit card balances with a personal loan at a much lower interest rate.
- Save more. Next year, individuals can set aside an extra $200 ($450 for couples) in a Health Savings Account to pay medical bills tax-free. You can put an extra $2,000 into your 401(k) or an additional $500 into your IRA. Every dollar deposited lowers your 2023 tax bill.
- Estimate your big bills. Every year brings a significant expense. It could be a new car, a major home repair or improvement, a child’s braces, or a new child. Start collecting price quotes for purchases and contractor services, and investigate how much your health insurance benefits will contribute to medical care. Make sure you have enough money set aside for upfront expenses.
Whether or not you are a Tropical Financial Credit Union member, help is just a click or phone call away. Contact our money professionals for a complimentary financial planning assessment. They will share their insights on college expenses, retirement budgeting, insurance and investments.