New Year, New Financial Goals: 3 Tips to Kick Start Your 2023 Financial Resolutions

If you're with the majority prioritizing starting off the new year with a list of resolutions, consider these financial tips to kick off 2023.

We know it's cliché, but a recent survey conducted in collaboration with Opinium found that 54% of Philadelphians plan to set financial resolutions heading into the New Year. If you're with the majority prioritizing starting off the new year with a list of resolutions, consider these financial tips to kick off 2023.

Budget

According to the survey, 1 in 3 Philadelphians are struggling financially. With economic uncertainty, this comes as no surprise. We asked respondents to choose their top three financial resolutions heading into the New Year. Setting a monthly budget and sticking to it was the most popular answer, selected by 42% of Philadelphians. While monthly budgeting is important, January is actually the ideal time to update your yearly budget in order to create and/or reevaluate your financial goals. Your yearly budget review should compare what you hoped to spend with how much you actually spent on areas in your budget — from mortgage/rent to retirement — during the previous year. From there, you can see how much money you'll have left over for your savings and wants.

Save

Starting off the year with saving will hopefully set you on the right path to being more financially secure in 2023. Whether it's saving towards retirement or preparing for the unexpected, it's important to put money aside. A general guideline is to have about six months' worth of expenses in your savings in case any unforeseen expenses pop up or you find yourself unemployed for a period of time.

While you're figuring out what portion of your paycheck goes towards your savings, it's a good time to also cut out excess spending. Research shows that 40% of Philadelphians are limiting spending money on dining out and other nonessentials, and only spending money on things that add value to their life in the New Year. Leave frivolous spending in 2022!

Pay Off Debt

Although paying off debt was not a top financial resolution heading into the New Year, it's a key step to taking control of your finances. If your debt is piling up, it's important to develop a payment plan for the year to start digging yourself out of it as early as possible. If you have many different debt streams, you may want to consider the Avalanche Method. First, you'll make the minimum payment on all of your accounts. Then, you should put as much extra money as possible toward the account with the highest interest rate. Once the debt with the highest interest is paid off, start paying as much as you can on the account with the next highest interest rate and continue the process until all your debts are paid off. It may take longer to see progress, but since you're tackling your debts in order of interest rate, you'll pay less overall and get out of debt faster.

Another option is debt consolidation. This combines all your debts so you only have one monthly payment. Paying off debt is not easy, but it allows you more freedom to do the things that you want to do. While it may take some sacrifice, and most of us would rather spend on wants instead of needs, it's worth the effort.

We hope that by using tips, we are helping you set and maintain good financials habits that will position you for success. Here at PFCU, we want to wish all of our members a safe and healthy start to the new year. We look forward to providing more financial advice to you through the rest of 2023.