In this article: Strategies that will help you get closer to financial wellness, financial goals to hit before year end, and how you can achieve financial freedom
As we enter the final months of the year, there is no better time to think about our financial wellness before heading into next year.
Our relationship with money heavily influences our day-to-day decision-making. Everything from minor purchases to extensive investments reflects our emotions and behaviors tied to our financial mindset.
We can maintain financial wellness when we plan and set goals accompanied by living purposely within our means.
When we tap into building financial knowledge, take purposeful actions with our financial decision-making, and set goals with our finances, we have the opportunity to welcome financial freedom.
But what is financial freedom, and why is it so powerful? Financial freedom can put our minds at ease. It helps us relax about the stresses that can occur as a result of money. Instead of feeling like your money controls you, you are the one in control of your finances.
Yet, it doesn’t come without strategy, preparation, sacrifice, and time devoted to carrying out certain financial habits.
As we begin to put a close to 2023, here are 12 ways to boost your financial wellness:
1. Assess Your Monthly Expenses
Take some time and sit down to review all your monthly expenses. Many of those expenses are often tied to a debit or credit card, and we may fail to recognize minor fees that accumulate. Take into consideration television and streaming packages, cell phone costs, and other reoccurring expenses.
Small, extra costs throughout the year can add up, so don’t overlook canceling something simply because it’s $15/month.
Is the gym membership being used?
Is that additional streaming service still necessary?
Do you still have that reoccurring subscription only because you have been putting off canceling it?
Ask yourself hard questions:
Is it time to cut back on unnecessary costs?
Is there more money going out than coming in?
If you aren’t sure, carve some time out on your calendar to sit down and evaluate some things. There is always room for improvement and growth.
2. Review Your 2023 Savings Plan
Was there a financial goal you had for yourself this year, such as paying off your car or credit card? Evaluate whether you met or exceeded your goals.
Now is the time to sit down and reflect on the bigger financial picture for your life.
We must always have a plan as to where we are headed when it comes to our finances. Pablo Picasso tells us this, “Our goals can only be reached through a vehicle of a plan, in which we must fervently believe, and upon which we must vigorously act. There is no other route to success.”
If you haven’t met your goal or paid off your debts the way you would have liked, some questions to consider are:
Did you stay within your budget?
Were there any major circumstances standing in your way?
If so, have a plan for how you will navigate them in 2024.
Don’t be too hard on yourself if you didn’t have a savings plan for 2023. Now is the time to plan one for next year. You can use an excel spreadsheet or even put pen to paper. It’s a good idea to sit down with your spouse or significant other to ensure you are both on the same page.
3. Replenish Your Emergency Fund
If you had unforeseen circumstances during the pandemic and had to tap into your emergency fund, make sure you take the necessary steps to rebuild the value of that account.
The amount needed in an emergency will vary dependent on your lifestyle. Many experts will suggest 3-6 months of living expenses.
However, throughout the last couple of years, we have seen that the amount needed could be more to get us through difficult circumstances. In my opinion, it’s a realistic amount that will make you the most comfortable should numerous unexpected expenses arise.
Related: 6 Powerful Ways To Boost Your Happiness With Money
4. Make Sure You Are Paying Yourself First: Increase Your 401(k) Contribution Percentage
Check to see if your company offers a retirement contribution match. A good goal to hit is to ensure you are contributing the amount your company matches. For example, if the company matches 6%, you should at least contribute 6% yourself. It’s essentially “free money.”
Not sure what the company offers? Speak to your manager or talk with HR.
The IRS contribution limit for individuals in 2023 is $22,500, with an additional $7,500 catch-up contribution for those over 50 (if manageable).
If you don’t have access to an employer retirement plan, look into a Roth IRA.
5. Contribute To A Health Savings Account (HSA)
If you are enrolled in a high-deductible health insurance plan, you can save additional monies for future medical bills. A health savings account (HSA) is a type of savings account that helps you set aside money on a pre-tax basis for qualified medical expenses.
This financial behavior can help you lower your overall health care costs because you’re essentially using money that you aren’t taxed on.
An HSA may also earn interest or other earnings which are not taxable.
*Note: not all companies offer one
6. Reach Out To Your Financial Advisor, If You Have One
Set up a meeting to review your financial plan and investment accounts. It’s always a good idea to do an annual check-in with your advisor. Some of the things you will want to be aware of are:
- the performance of your accounts
- the strategy your money is being invested in
- if it’s time to assess the contributions
7. Review Your Mortgage (if you own a home)
Speak with a mortgage specialist to see if refinancing makes financial sense.
8. Make A Contribution To A 529 College Savings Account
A 529 college savings plan is an investment account that offers tax benefits for qualified education expenses.
As education costs continue to grow, it is worth seeing if the state you live in offers a tax break for your contributions.
If the money is used to pay for qualified higher education expenses, it can be withdrawn tax-free.
Speak to your financial advisor and tax professional to learn more.
Related: 7 Healthy Money Habits You Need To Start Today
9. Check Your Credit Score
Did you know you are eligible for a free annual credit report? You can visit different sites online, such as Experian, Equifax, or Transunion. It is essential to be mindful of your score as it can affect your financial well-being.
10. Pay Off Your Credit Cards
If you have any credit cards with outstanding balances, now is the time to pay them down or pay them off if you are capable.
11. Reevaluate Your Money Mindset
If you want wealth and abundance in 2024, I believe it’s imperative to create a positive financial mindset to achieve financial wellness.
While we may hear things such as money is the root of all evil, let us also remember it is a great resource and tool if you use it correctly to help build a life you love.
Thomas J. Stanley once said, “Before you can become a millionaire, you must learn to think like one. You must learn how to motivate yourself to counter fear with courage.”
Related: How To Prepare Your Mindset So You Can Dominate Your Goals
Below are three books recommendations that help support your mindset shift when it comes to your finances.
The last one is a must-read to help support your children with learning about finances.
The Total Money Makeover: A Proven Plan for Financial Fitness
Rich Dad Poor Dad: What the Rich Teach Their Kids About Money That the Poor and Middle Class Do Not!
12. Give Back (if it’s within your means)
What better way to end the year than donating to a charity you are passionate about. Five years ago, I decided to sponsor a little girl in Uganda. It has been a blessing sending letters back and forth with her. My monthly contributions help pay for school supplies and support her family with some of the care she needs. No matter the amount you can give, remember that every little bit makes a difference.
Habits such as these can help us move towards financial success and can help us enjoy life with abundance. I hope you view the upcoming year with optimism and recognize that financially, where you are today doesn’t mean it needs to stay that way.
Here is to entering 2024 with a shift in our money mindset and conquering our financial wellness
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Excellent read. Great information and financial suggestions. Definitely going to change my finances for the new year.