This is the time of year that everyone is focusing on improving their heath. It’s also a great time to evaluate your financial health.
People that commit to performing annual checkups on their finances wind up ahead of those that ignore the exercise. 2023 has just begun… so it’s the perfect time to take steps take steps to change your outlook for the better. See below for some tips, and suggestions for getting your financial house in better order.
Current Conditions
The stock market is still down over 10% since its early 2022 highs, and the value of your home(s) may have decreased somewhat in recent months, so it’s good to do a thorough check of where you stand to see if any recalibration is in order.
Taking Stock of Your Goals
First and foremost is an evaluation of your financial goals. If you haven’t written any down, then now is the time to do that. Your goals will be specific to your circumstances (income, outgoing living expenses, debt load, and amount available to put into savings). You may not be able to save as much as somebody else, but YOU BOTH NEED TO BE SETTING ASIDE MONEY. Be smart, and frugal. The more you can sock away, the better.
Establishing a Budget
Are you writing a monthly budget? Sticking to a sensible budget will allow for more of your money to be saved and working for you. When assessing your budget, be sure that you’re including line items that help you reach whatever financial goals you’ve created.
Aggressively Tackle Existing Debt
Next might be a hyperfocus on debt (mortgage, car loans, student loans, credit card, etc.). Being debt-free as soon as possible means you’ll be able to achieve a better level of financial freedom sooner. There are some great plans for eliminating debt, including those offered by Clark Howard, and Dave Ramsey.
Create an Emergency Fund
Creating an emergency fund makes great sense. Experts say that emergency funds should be equal to three to six months’ worth of expenses. Set a goal of how much you want to hold in your emergency fund. Then set up an automatic transfer into your savings account each month that will help you reach your goal.
Understand Your Investment Accounts
It’s smart to evaluate the performance of investment accounts annually. For both retirement and non-retirement investment accounts. Keeping track will allow you to switch gears if there is underperformance, and to switch to funds with the lowest possible fees.
Review Tax and Insurance Costs
Make sure you review your tax situation, and insurance coverage as well. There could be deductions you’re not taking, and better, cheaper insurance coverage available. Savings from sources like these can go directly to your bottom-line savings, and that’s the name of the financial health game!
To learn more about all things real estate, check out Karen’s Blog Page on her website. You’ll find lots of information, tools and tips!
Want to meet with Karen to check on your home’s current value, or explore what buying or selling means today in the current financial market? Karen would love to help. Contact her today to get started.
