Make 2023 Your Best Financial Year Yet With This 3-Step Checklist

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Setting goals and planning are cornerstones of financial success.


Key points

  • The first step is to review your financial goals so you know what to focus on this year.
  • A great way to ensure you stay on track financially is by creating a budget and net worth statement.
  • A financial plan will help you meet your financial goals and track your progress.

The start of a new year is the perfect time to reset and take charge of your finances. Whether you’re just starting out in your career, or have been in the game for a while, everyone needs to ask themselves three important questions regarding their finances.

  1. Where do I want to go?
  2. Where am I now?
  3. How will I get there?

Following this checklist can help you answer these questions and make 2023 your best financial year yet.

1. Set your financial goals

Setting your financial goals answers the first question. Without first determining what your financial goals are, there will be nothing to work towards or focus on. Your financial goals help give you a sense of direction and motivation when things get tough. Take some time to write them down and post them somewhere within easy view.

You can even break them down by short term, mid term and long term. Long-term goals may be to retire at a certain age; a mid-term goal to save for a home; and a short-term goal can be to save enough for your emergency fund. Make your goals SMART (specific, measurable, achievable, relevant, time-based) and share your goals with others so they can help you be accountable.

2. Create a budget and net worth statement

This answers the second question, “Where are you now?” Like a GPS tracker, you need to know with accuracy where you currently are so you know the path to get to your goal. Creating a budget and a net worth statement isn’t as intimidating as it sounds. In fact, it’s one of the most important steps you can take when planning for your financial future.

A budget helps you keep track of your income and expenses so that you know exactly where your money is going each month. It also allows you to plan ahead and prioritize how much money you want to save each month. Your net worth statement is a list of your assets (cash, investments, property, etc.) and your liabilities (credit card debts, loans, mortgages, etc.).

Once you have a clear picture of your finances, it will be easier to make smart decisions about your spending habits and what liabilities to reduce so you can reach your financial goals.

3. Create a financial plan

Now that you know where you want to go and where you currently are financially, you can create a financial strategy and a plan to get there. Let’s say you want to retire at age 50 living off $50,000 per year (your goal). If you are currently 30 and just paid off your education, but have little savings (budget and net worth), how much do you need to save? The answer will depend on a variety of factors, but by using the 4% retirement rule and assuming a 10% annual return, you will need to save about $1,600 a month (how you will get there) to reach your goal. Can’t afford that? Then you may have to adjust your goals. This is why knowing your budget and net worth is so important!

Saving money should be at the top of everyone’s list when it comes to their financial future. Start by setting up an emergency fund. It’s always good to have some cash saved away for unexpected expenses or emergencies that arise. Then, work towards creating longer-term savings goals and maxing your retirement accounts. You should also consider setting aside additional funds each month specifically for large purchases like cars, vacations, or home renovations so that those items don’t become too much of a burden financially down the road.

Any financial plan will need to address paying off any debt as soon as possible. Credit cards, car payments, and other debts — these all add up quickly if they are not taken care of immediately. The sooner they are paid off, the more money you will have available each month to save. Consider consolidating any high-interest debt into one loan with a lower interest rate so that it is easier to keep track of payments and manage your overall debt levels.

As part of your financial plan don’t forget to look at your insurance coverage. Do you have enough life insurance, home insurance, and other forms of coverage? Do you need a will or estate plan for your beneficiaries? Addressing these issues is also an important aspect of your plan and will help give you greater peace of mind.

Making small changes now can lead to big results later. This checklist provides just a few simple steps anyone can take today in order to create a secure financial future for themselves. Your plan will help you track your progress towards your goals. So why wait? Start taking control of your finances now and set yourself up for success in 2023. With this checklist in hand, nothing is stopping you from achieving your financial goals this year!

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