Tips to Prepare Financially for 2023
The past couple of years has certainly been turbulent for many folks. Unfortunately, as of right now, it seems that turbulence will continue into 2023. With rapidly rising interest rates, out-of-control inflation, and a looming recession, financial preparation is essential! In order to help you and your family navigate these trying times, we’ve put together a few of our favorite tips to prepare financially for 2023.
Take Inventory of Your Current Position
Before you do anything, it’s important to look at where you are financially. Be honest with yourself and take a look at all of your assets and your debts. If you find yourself lacking on the asset side, or maybe in a bit of credit card debt, that’s probably a sign you should cut back on spending. Not everyone will have that problem, though. Others may have the problem of having too much cash, and not enough money invested in the markets. While this is certainly better than being inundated with debt, staying invested in the market for your retirement is important.
Regardless of your position, look at your personal balance sheet, be honest with yourself, and try to identify any issues you may have with your finances.
Create a Budget (If You Don’t Have One Already)
Once you have identified where you stand financially, you should create a budget if you don’t have one already. Having a budget is incredibly important, as it will put your earnings and spending in perspective.
For those who don’t already have a budget, making one is simple. First, add up all of your monthly income - for most people, this is just what they earn from their job, but some people may have income from a side business as well. After you have your total monthly income, list all of your monthly expenses - and we do mean all of them, even your streaming service memberships.
From there, you can compare your income and expense figures, and make adjustments as you see fit. After making any necessary changes, refer back to your budget weekly to make sure you’re staying on track!
Set Some Goals for Yourself
Goals are important in life - without them, you don’t have anything to work toward! That’s why you should always identify goals that can be accomplished within a certain timeframe, such as a year, or even just a couple of months.
When setting financial goals, you should have realistic, achievable milestones. While most people would love to go from zero to a millionaire in just a year, that’s not likely to happen. Some examples of great financial goals are getting out of credit card debt, paying off your car or mortgage early, or saving $5,000. While these goals are not nearly as glamorous, you are much more likely to achieve them!
Revisit Your Retirement Plan
Many people put off planning for retirement, or simply have a “set and forget” approach. Unfortunately, these are not the right mindsets to have when it comes to saving for retirement. When planning for retirement, it’s important to revisit your plan periodically, to ensure that you’re on the right track. Urban Wealth Management has been helping people in Southern California with their finances for over a decade. Whether you’re looking for help managing your money or planning for retirement, Urban Wealth Management can help.