Financial Resolutions for 2023

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Melissa Photo 2By Melissa Forte-Litscher

If your next New Year’s Resolutions are more about fiscal fitness than physical fitness, you aren’t alone! While it is common to want to lose weight, drink more water and eat better to look and feel good, most of us would greatly benefit by improving our finances. It’s important to get financially healthy and it’s possible, even in these uncertain times. Take a look at some of these financial resolutions and see which one(s) will help you achieve your short- and long-term financial goals.

Almost anyone could use a goal to put away more savings. So, number one is Save More. Some ways to do this include increasing your monthly contribution to your 401K or IRA, or beginning an automatic transfer into a savings account. Cut back on unnecessary spending; one less coffee shop trip per week could be the start of saving $20 per month! Consider saving a portion (or all of it!) of your tax refund to give your savings a boost. Check out Okaloosasaves.org, a chapter of America Saves, a campaign coordinated by the nonprofit Consumer Federation of America (CFA) which is dedicated to helping individuals save money, reduce debt and build wealth. You can find a lot of resources to help you get started on a savings plan.

Secondly, create a personal budget. Although most of us feel like “being on a budget” is like being on restriction, tracking spending will help you understand where your money is going each month. Setting a plan will actually free up some time and allow you to decide where your money will be spent. Start by listing your fixed expenses, like mortgage/rent, car and insurance payments, utilities, food and phone costs, and then see what you have left for flexible expenses like clothing, eating out and entertainment. Use your bank and credit card statements to get an idea of where the money is going. There are many budget plans available online, as well as some great apps like Mint and PocketGuard.

Improving your credit score is another great goal for improving your financial situation. Several key ways to improve your credit score are making your credit card payments on time, paying off loan and credit debt completely, and limiting how many new accounts you open. Check your credit score through a current account holder, or try Credit Journey or CreditWise, which are free. Be sure to check your credit report for errors at least once a year. The credit bureaus, Experian, Equifax and TransUnion allow you to receive your credit report for free once a year each from annualcreditreport.com and they provide a way to dispute any errors you find.

An additional resolution to add is to set a goal to invest in real estate. Real estate investment offers multiple ways to increase your financial health, such as increasing your net income, tax savings, principal paydown, home price appreciation, and according to a recent article in Financial News and Daily Record, a hedge against inflation. “When inflation goes up, the prices of goods and services also increase. But since your mortgage payments remain the same, your purchasing power actually goes up! This makes real estate a great hedge against inflationary pressures.”

Here in Okaloosa County, we have seen an average home price appreciation of approximately 8.4% over the last five years, based upon statistics from Florida Realtors Sunstats. That far exceeds the last five years of CDs yielding less than 1% per year. When you are ready to invest in a home of your own or begin your real estate investment portfolio, I’m at your service. We can meet in the office and save that coffee shop money towards a down payment!