In our December blog, we shared 3 tips for ending 2022 and starting 2023 on the right financial foot – including the importance of having an annual money roadmap – or a financial plan, if you will!
Keep reading as we break down why 2023 financial planning should be at the top of your list of things to do this month, plus some tips on how you can put together a successful plan.
Set short and long-term financial goals
The first step in creating your 2023 financial plan is setting goals.
Think about what you want to accomplish financially in the next few years. These goals should help anchor the rest of your financial plan. Some common goals might include:
- Paying down debt
- Increasing your net worth
- Saving a downpayment for a house purchase
No matter what your end goal is, it is important to approach these goals with realistic expectations and timelines. Writing down your goals gives them added accountability and will help keep you motivated to reach them.
Tackle your debts
Setting a financial plan can also help you with tackling any existing debt.
Planning out your budget, income, and expenses can help you to stay within your means and tackle debt one payment at a time.
Some tips for debt planning include:
- Set up automatic payments to make sure you’re staying on top of payments
- Consolidate or refinance any high-interest debt at lower rates
- Tackle highest-nterest debt first
- Make additional payments where possible to reduce interest payments
Plan an emergency fund
If you don’t have one already, your financial plan should include creating an emergency fund.
Planning an emergency fund is a smart move to protect yourself against the unexpected. While it may take some effort to save up, having that cushion can be hugely beneficial when life throws a curveball.
It likely won’t happen overnight, but make a plan to save up at least three months of living expenses. This will ensure that you have financial security in the event of job loss or other large expenses – like car repairs or big vet bills.
Invest in your future
As we journey through life, planning and investing for our future should be one of our top priorities.
Retirement and other long-term financial goals may seem like a distant concept right now. But making it part of your 2023 financial plan can bring you one step closer to making them a reality.
When making financial moves, you should take advantage of plans like a Registered Retirement Savings Plan (RRSP) and Tax-Free Savings Accounts (TFSAs) that will provide savings growth over time. You should also look for high-yield savings accounts that offer higher interest rates compared to those of traditional savings accounts.
Finally, look at additional ways you can invest in your future. For example, taking advantage of employer RRSP matching programs are a great way to get ahead.
Protect your hard-earned assets
A comprehensive financial plan is about more than just investing and increasing your income. It includes taking steps to protect your loved ones and your hard-earned assets.
Purchasing life insurance is an easy way to get peace of mind. Life insurance provides a lump-sum payment to your beneficiaries in the event of your death. This way you know that if the worst should happen, your family is shielded from any additional financial stress.
Another key part of your financial plan should be creating a will and estate plan. A will formalizes your wishes and key decisions, so you know your assets will go to the right people when you pass away.
While these sound like big tasks, they’re an easy way to make sure your finances are protected. In fact, you can even purchase things like life insurance or create a legal will online.
Make your 2023 financial plan today
Creating a successful 2023 financial plan does not have to be overwhelming or complicated. With these tips in mind, you can start creating (and sticking) to your unique financial plan today.
No financial plan is one-size-fits-all. If you’re looking for financial advice and tools tailored to your unique situation, Everest Financial Services can help. Book a free consultation call and get a head start on your 2023 financial planning today.