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

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Goal setting and planning are the 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 is to create 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 control of your finances. Whether you’re just starting out in your career or have been in the game for a while, there are three important questions everyone needs to ask themselves about their finances.

  1. where do i want to go
  2. where am i now
  3. How to 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 financial goals answers the first question. Without first determining what your financial goals are, you will have nothing to work towards or focus on. Your financial goals help give you a sense of direction and motivation when the going gets tough. Take the time to write them down and post them somewhere so you can easily see them.

You can even divide them into short, medium and long term. A long-term goal may be to retire at a certain age; medium-term goal of saving for a house; and a short-term goal may be to save enough funds for an emergency fund. Make your goals SMART (Specific, Measurable, Attainable, Relevant, Time-Based) and share your goals with others to help keep you accountable.

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2. Create a budget and net worth statement

That answers the second question, “Where are you now?” Just like a GPS tracker, you need to know exactly where you are right now to know the way to get to your destination. Creating a budget and net worth statement is not as intimidating as it sounds. In fact, it’s one of the most important steps you can take in planning your financial future.

A budget helps you track your income and expenses so 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 debt, loans, mortgages, etc.).

When you have a clear picture of your finances, it will be easier to make smart decisions about your spending habits and what commitments to cut back in order to reach your financial goals.

3. Create a financial plan

Now that you know where you want to go and where you are financially right now, you can create a financial strategy and plan to get there. Let’s say you want to retire at age 50 and live on $50,000 a year (your goal). If you are currently in your 30s and have 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 using the 4% retirement rule and assuming a 10% annual return, you’ll need to save about $1,600 a month (as you get there) to reach your goal. You can’t afford that? Then you may need to adjust your goals. That’s why knowing your budget and net worth is so important!

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Saving money should be at the top of everyone’s list when it comes to their financial future. Start with that establishment of an emergency fund. It is always a good idea to have cash saved for unexpected expenses or emergencies. Then work on creating long-term savings goals and maximize your retirement accounts. You should also consider setting aside extra funds each month specifically for big purchases like cars, vacations, or home renovations so that these items don’t become too much of a financial burden.

Any financial plan will need to address paying off any debt as soon as possible. Credit cards, car payments, and other debts can all add up quickly if you don’t take care of them right away. The sooner they are paid off, the more money you will have available to save each month. Consider consolidating any high-interest debt into one lower-interest loan to make it easier to keep track of payments and manage your overall debt level.

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Don’t forget to look at your insurance coverage as part of your financial plan. Do you have sufficient 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 more peace of mind.

Making small changes now can lead to big results later. This checklist contains just a few simple steps that anyone can take today to create a secure financial future. Your plan will help you track your progress toward 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 stands in the way of achieving your financial goals this year!

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