Michael Baum, CFP® RICP®
Vice President & Associate Financial Advisor
The last few years have been, well... a lot, and 2022 was no exception. Between pandemic-related economic challenges to ballooning inflation, many have felt the financial strain.
If you're looking to make 2023 a better year for your finances as well as your stress level, these seven moves will (hopefully) do the trick.
Financial Move #1: Spend Smartly
Make your 2023 mantra an easy one: spend less, reduce stress. Before you buy, ask yourself, "will this actually improve the quality of my life?" If the answer is no or if it will just add clutter to your home (which can also add stress), then skip the purchase.
You can start small by doing things such as:
- Foregoing your morning latte and brewing a pot at home instead
- Cooking at home rather than going out to dinner
- Not buying new clothes regularly
- Checking for a new phone plan
- Waiting a few days and really considering each purchase to limit impulse spending
The above things can become lifestyle changes that you can implement into your everyday life.
Financial Move #2: Reduce Debt
Getting rid of, or at least reducing, your credit card debt can relieve an immense amount of financial stress. That's especially true now that interest rates are the highest they've been in decades. Start by paying off the credit cards that have the highest interest rate before working your way down the line to lower-interest loans. Making small changes can start becoming more of a lifestyle, therefore making it easier to reduce your debt.
Bonus tip: you can use our Snowball Debt Elimination Calculator to help you plan.
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Financial Move #3: Track Expenses
If you track exactly where your money is going, it will give you a greater idea of where your overall financial picture stands. Simply understanding where your money is going can help you to really own it, which in turn can start to reduce financial stress. Here again, our Home Budget Calculator can make the job easier.
Financial Move #4: Trade “Stuff” for Experiences
While you are still spending money here, research shows that people enjoy experiences more than possessions, so this is a great way to make better use of our money. Rather than buying a new outfit, you could spend your money on:
- Cooking classes
- Traveling (when safe to do so)
- Art classes
- Spending more time with friends and family
Whatever it may be, this will prevent stress and burnout while providing you with positive memories.
Financial Move #5: Read Financial Success Stories
Simply reading success stories is a great way to change your mindset when it comes to a healthier financial lifestyle. Suppose you read about people who have been in your situation who were able to pay off debt, started earning more money, or overcame some type of financial hardship. Their stories may inspire you to implement these tactics into your own life.
Financial Move #6: Create an Emergency Fund
It can be difficult to comprehend creating an emergency fund when you are already financially stressed. But whenever you can, put any extra money aside at the end of the month into an emergency fund for unexpected expenses, such as house repairs, car repairs or healthcare costs.
Financial Move #7: Start a Spending Plan
Once you’ve worked diligently to reduce debt and build an emergency fund, start a spending plan. When you do this, you’ll need to track your income while making a plan for all that you are earning. You can prioritize your spending once you have allocated the funds to cover expenses. This should hopefully help you breathe a little easier as you spend money while staying on track.
2022 has been hard on many people, personally, professionally and financially. As we kick off 2023, use these tips to help reduce financial stress and set yourself up for a better year ahead! Better yet, take it a step further and get strategic about planning for financial security and wealth building well into the future. Get in touch for a consultation to see how our Plan Well, Invest Well, Live Well strategic process can help you say goodbye to financial stress for good.
Presented by Vice President, Associate Financial Advisor, Michael Baum, CFP® RICP®. Securities and advisory services offered through Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser. These materials are general in nature and do not address your specific situation. For your specific investment needs, please discuss your individual circumstances with your financial advisor. Weiss, Hale & Zahansky Strategic Wealth Advisors does not provide tax or legal advice, and nothing in the accompanying pages should be construed as specific tax or legal advice. 697 Pomfret Street, Pomfret Center, CT 06259, 860.928.2341. http://www.whzwealth.com