Popular Financial Resolutions People Made For 2023
Many people see the start of a new year as a chance to take control of their finances and improve their financial well-being.
This is a fantastic idea and there are lots of steps you can take in January/February that will set you up for a good year to come.
Interested? Keep reading to find out more.
Why set financial resolutions in the first place?
The start of a new year is a good time to start afresh.
The financial resolutions set the tone for the whole year.
It determines what are you going to do every day. It gives you motion, focus, and purpose.
Setting meaningful financial goals brings financial security and freedom.
The most popular finance goals people set themselves this year include:
1. Analyse cash flow to remove waste
If you’re in a position where you’re not able to really understand where you’re going wrong, simply watching and seeing where you’re wasting money from one month to the next might give you a better idea. You can use an Excel spreadsheet, a simple pen & paper, or an app to do that.
Look at how much money you made in 2022 compared to what you spent.
You should look to see how much leftover money you have at the end of the month and what you spent it on.
People often stress about money because they feel that they lack control, so analyzing your cash flow will give you more control.
Knowledge is power. What is counted, can be managed.
2. Create a budget and stick to it
Go through all your expenses and find ways to save money.
This may include cancelling unnecessary subscriptions, shopping at a cheaper supermarket, and cutting back on impulse purchases.
Implementing a monthly budget will help to control your spending and ensures that you do not overspend.
A 50/30/20 budget is a simple way of making a plan for your income and allocating your spending, There are clear and distinctive categories – 50% for needs, 30% for wants and 20% to put aside as savings.
At the beginning of the month, you could, for example, allocate £300 on “wants” and put it into a separate debit card like Monzo. Once the money is spent, it’s spent and you have to wait until the next month and payday to top up your Monzo again.
Once you get paid, immediately transfer 20% of your income straight into my savings account, as opposed to saving what is left over from spending. This strategy limits your monthly spending money and forces you to be mindful.
Treat it as back-up for any time you’re not earning (illness, unemployment, redundancy, or time off), and don’t withdraw it until you really, really need it. Make it a goal to have at least 6 months’ worth of income set aside and work up to it!
3. Create a secondary revenue stream
One of the best ways to improve your financial wellbeing is to create multiple income streams.
I hate relying on 1 income stream, so I have always had several. Read more about my philosophy on income.
I believe what you do on the side will create your next job or promotion. I think the future is about multiplying your skills and streams of income, not focusing on just one.
If you’re reasonably intelligent, being employed in one role is one of the worst things you can do to support yourself.
By supplementing your income, you can improve your standard of living and build towards a brighter future.
There are many good options for secondary revenue options:
* Selling physical products online
* Dog walking
* Online trading – CFD trading is another good option allowing you to make money by trading various commodities without buying the product. Please note that your money is at risk.
4. Clear unwanted debt (starting with high-interest debt)
With interest rates rising, now is a good time to pay off debt.
You should factor debt clearance into your monthly budget and focus on the high-interest debt first like credit card debt or short-term consumer loans.
If you’re a Millennial struggling with money, the first step is to create a budget and make a plan to pay off your credit card debt.
Paying off your credit card debt should be your number one priority before you start saving and investing.
5. Start investing
Investing might seem like something scary and complicated that you don’t know much about, but it doesn’t need to be that way. You can invest in stocks and shares, index funds, bonds, property, currency, and much more.
Long-term investing almost always beats saving because cash won’t keep pace with inflation. In fact, by keeping money in the bank, you actually lose money every year due to inflation.
Money as a currency is fluid, its value changes over time.
Investing is not about getting rich quickly.