As 2023 rapidly approaches, it’s a great time to assess your current financial situation and review your overall financial goals. Did you meet your goals? If not, how much progress have you made? Are you working toward your objectives step-by-step? Are you close enough to your end-of-year goals that you can see them on the horizon?
Considering any challenges that 2022 presented, you may have encountered some difficulties that have placed your financial goals on the back burner. Don’t get discouraged!
Reflect on Your Annual Spending
Assess your finances and review your spending habits. Look back at your monthly expenses since the beginning of 2022. Where has your money gone? How much of your spending was essential, and how much of it wasn’t? Have your spending habits prevented you from progressively paying down your debt? Use a free budget calculator to help you itemize your expenses to figure out just how much you’re spending.
It is important to identify areas of improvement in terms of your overall expenses and your debt levels alike. This is vital if you want to close the gap on this year’s financial goals and set yourself up for financial success in 2023.
Start Planning for the New Year Now
Develop your annual financial plan for the coming year by using what you learned this year to help set – or reset – realistic goals for next year. After identifying all expenses that you can eliminate or trim down, you can make a workable budget.
Consider all the different ways you can pay down debt and save for the things you value the most. Be creative! Consider the very best ways you can use your tax return, end-of-year bonus, and other forms of "extra" cash. While you continue to devote your regular paychecks to meet your ongoing financial needs, other incoming funds can get you closer to your important long-term objectives.
Need Help with Your Taxes? Community Tax Can Help!
Community Tax has extensive experience assisting taxpayers with significant IRS tax burdens. Their dedicated team is ready to provide you with a free consultation to help determine the best plan of action for your specific situation.
Review Your Retirement Plan, Insurance & Other Investments
Whether retirement is years away or around the corner, now is the time to review where you stand with meeting those goals. A great place to start is by making sure you are taking full advantage of any matching fund plan that your employer may offer. Your retirement contributions may reduce your taxable income, so in addition to planning ahead for 2023, you should also be looking at your 2022 contributions. There may still be an opportunity to reduce the amount you pay in taxes this year.
No matter how 2022 has impacted your finances, you’ll want to start off the new year on the best foot possible. By re-evaluating and resetting goals now, you’ll be able to stay on the path to financial health and continue to progress toward your goals.