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Setting Financial Goals in 2023


Setting Financial Goals in 2023

It is that time of year when you begin setting goals for the new year. In addition to starting a new exercise journey or diet, consider adding some financial goals! The first step in adding a financial New Year’s resolution is determining your short-term and long-term goals. Do you want to save for an extra vacation next year? Are you ready to retire? Do you want to have all your debt paid off? Whether increasing your savings or creating a budget, this is the perfect time to start. The best way to set goals is to make them SMART- S-Specific, M-Measurable, A-Achievable, R-Relevant, and T-Time based.

Here are some ideas to get you started:

 Analyze your Spending

  • Analyzing your spending can be the first step in any financial goal you are trying to achieve. If you don’t know what you’re spending, start keeping track. If you use credit cards for most of your expenses, they often have a tool that will show you how much you are spending by category for a specific period. Several apps can consolidate and track your spending across accounts, such as Simplifi or Personal Capital.
  • Once you have an idea of your expenses, create a budget. It doesn’t need to be incredibly detailed, but it will give your family some guardrails on a monthly or annual basis. A simple way to start a budget is to use the 50/30/20 method. Divide your net income into three sectors. The first sector is 50% for needs. Think groceries, gas, utilities, etc. The second sector is 30% for wants. Think shopping, entertainment, and dining out. Your final sector of 20% is your savings and debt payments. If this seems like an overwhelming task, you can start small! Review all your subscriptions. If there is something you don’t use or need, cancel it!! (And yes, I am talking about the gym membership you haven’t used in months!)

Increase your Savings

  • If you already know what you are spending and have excess cash flow, consider increasing your savings as a 2023 goal. The first step is determining where you need to save. Here are some potential savings opportunities:
    • Replenish your emergency fund. You should maintain between 3 to 6 months of living expenses outside of your investment accounts for emergencies.
    • Fund your 2022 IRAs (You have until April 15th)
    • Fund your 2023 IRAs
    • Increase your contribution to your company retirement plan. Additionally, you can review the ratio of Pre-tax to Roth contributions you are making to this plan with your advisor.

The IRS increased its contribution limits for retirement plans starting in 2023. If you are taking advantage of the maximum contribution, this could be a good time for you to increase your savings to the new maximum. Review the IRS website for the new retirement plan limits.


Plan your Estate

  • Another important goal for 2023 would be to update your beneficiaries and establish estate planning documents, including a will, financial power of attorney, and medical power of attorney for you and your spouse. This is especially important if you are a new parent in 2022 and need to designate a guardian for your children or add contingent beneficiaries to your company retirement plans.

If you are still trying to set financial goals for the new year, consider developing or updating your financial plan with your advisor. This can be a great way to stay on track and ensure you are still on track to meet existing goals. A financial plan allows you to put your goals into action by being S-Specific, making them M-Measurable, A-Achievable, R-Relevant, and T-Time based.

If you have questions and would like to talk with us further, please call us at 513-271-6777. For more THOR reading, click here to go to the Blogs and Market Updates section on our website.

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Written by

Grace Cappellini

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