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Preparing January Financial Checklist starts 2023 off right

The start of the year is a perfect time to reflect on and plan your financial picture.

By reviewing, you can analyze how well you did financially in 2022, and what adjustments you may need to make in order to accomplish your financial goals in 2023.

So, how can you make sure you stay on track for the entire New Year?

  1. Review Your 2022

Last year was undeniably a tough year for many Americans, with all of the economic and employment insecurities. So don’t be too hard on yourself if you didn’t hit all of your financial goals. Instead, learn lessons from 2022 to make your checklist for 2023.

For example, did you make a financial plan in 2022, and did you stick to it? Did you run a surplus or a deficit? Were there things beyond your control that created financial difficulty, or did you make financial stumbles of your own accord? Take an honest assessment of how you performed financially in 2022 so you can start making plans for 2023.

  1. Set a New Budget

Setting a budget for 2023 is an important step in your financial plan. When you are tracking where you spend your money, it becomes easier to adjust and increase your savings.

  1. Automate Your Savings

The easiest way to boost your savings is to put it on autopilot. Human nature makes it hard to save, as it always seems like there’s something you can spend your money on. But if you automate your savings, it takes emotion and choice out of the equation. Without any effort on your part, funds are automatically taken out of your paycheck and safely tucked away into a savings account. Over time, you likely won’t even miss the auto-savings, but you’ll love the way your account grows in value.

  1. Autopay Your Bills

Life can be so busy in the modern world that it’s easy to forget to pay all your bills on time. This is particularly true if you have a complicated financial life, with mortgage and auto loan payments, credit cards, utilities and insurance payments.

To avoid costly late fees, which amount to just throwing money down the drain, put all of your bills on autopay. You’ll never miss another payment, and you’ll never pay a bill late. This is also a great practice to increase your credit score.

  1. Increase Your Retirement Contributions

Retirement plans are great financial tools. In addition to the savings aspect, most retirement plans offer tax breaks on contributions and tax-deferred growth.

Ideally, you want to maximize your contributions by setting aside 10 percent to 20 percent of your income. If this seems too daunting to try all at once, start by increasing your contributions in 1 percent increments. You’ll hardly notice the additional money diverting out of your paycheck, and before you know it, you’ll be up to that 10 percent to 20 percent level. Whether you increase your contributions by 1 percent per month or 1 percent per year, put it on your financial checklist.

  1. Review Your Insurance Contributions

Insurance is an often overlooked aspect of financial planning, but it’s critically important. The start of the year is a good time to review your financial life and see if there have been any changes. For example, if you’re married and only one of you is working, you’ll want to make sure you have enough life insurance coverage. If you’ve made improvements to your home, you might want to bump up your homeowner’s insurance. Auto insurance and disability insurance should also be reviewed. Consider consulting with a financial professional to see if you should have additional insurance, such as an umbrella liability policy.

  1. How much should you have in your Emergency Fund

It’s impossible to predict when an emergency will arise, so being prepared is the best recommendation. Your emergency fund should ideally be large enough to cover monthly expenses for three to six months.  A few examples of those expenses would be mortgage, rent, car loan, credit card payments, utilities and any other monthly maintenance expenses you are responsible for on a monthly, quarterly or semiannual basis.

  1. Rebalance Your Portfolios

Review your investment objectives and risk tolerance and make sure that your portfolios are still in line with these parameters. Be sure to make an appointment with your financial advisor to review your portfolio.

  1. Check Your Tax Withholdings

Tax season is around the corner. Getting a tax refund may be nice, but it might mean you had too much of your income withheld from your paycheck. Owing the IRS money may mean you had too little taken out of your paycheck. To ensure that you have the right amount of money withheld from your paycheck, evaluate the formula you apply to determine the exact amount withheld from your check. Check in with a tax preparer to ensure withholding accuracy.

  1. Estate Plan

Review your estate plan to confirm everything is still intact if a situation occurs. If you have not done estate planning, speak with an attorney to start the process. If you’re ahead of the game and have already set up an estate plan, review it annually to ensure it is still up to date.

Happy New Year, and here’s to a financially successful 2023!

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Delta Jones-Walker

Connect with Delta Jones-Walker and Atled Financial on Facebook, Twitter: @Atled Financial and LinkedIn! To schedule a free consultation or a presentation to your group or organization, call 219-513-3710 or email [email protected] and mention this column. Topic ideas for this column are welcome!

Securities and investment advisory services offered through Woodbury Financial Services, Inc. (WFS) member FINRA/SIPC. WFS is separately owned, and other entities and/or marketing names, products or services referenced here are independent of WFS. Insurance services offered through Atled Financial Group 3801 Ridge Road, Highland, IN.

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