5 Ways to Get Your Financial Life in Order in 2023

A new year means setting new objectives. For many of us, one of the biggest goals is to improve our financial picture.
But some New Year's resolutions can be overly ambitious or ineffective. Instead, it's more beneficial to concentrate on intentions that are both impactful and within your reach. 
Here are a few mindset-changing resolutions that can help achieve your financial objectives in 2023. 

For more New Year's resolutions, find out ways to improve your mental health, places to recycle tech you don't use anymore and how to declutter your closets without losing your mind.

1. Establish a starting point

Before you can determine how to save more and spend less, you need to figure out what your financial picture is. Take a look back at the past year to review your cash flow and your highs and lows. That's the first step to making a comprehensive -- and realistic -- effort toward achieving your financial goals.

You don't have to get super-specific -- ballpark figures are fine.
It's also helpful to consider what you hope to accomplish financially in the next year or two. For instance, is buying a house at the top of the list? Maybe finally taking a vacation after nearly three years is a priority. One of your kids might be driving soon or preparing to leave for college. Reviewing what you need to save for is useful as you start to prep your financial blueprint. 

2. Pay yourself first

"Pay yourself first" means rewarding your future self by contributing to retirement funds, emergency funds, saving accounts and investments. Work on setting these investments up automatically, with a set amount deducted from each paycheck.

"In other words, you are prioritizing your long-term financial well-being," Wells Fargo said in a statement. "It may seem unrealistic to talk about paying yourself first when you're faced with so many other financial obligations. Yet, while it's critical to pay all your bills on time, planning for your future can't always take the back seat."

Many employer-funded retirement plans, like 401ks and IRAs, allow you to contribute pre-tax dollars each pay period. For other savings and investing accounts, you can often set up directions to divert money each time you're paid.
This way, your paycheck represents what you have to work with after taking care of your savings goals. It's also easy to update the amount you're saving if your income or personal situation changes. 

3. Plan for unexpected expenses

Life is full of surprises -- that's been made clear throughout the pandemic and rocky economy. Creating an emergency fund can offer you a financial cushion if you lose your job, experience a pay cut or have emergency medical expenses. 

There's no set formula for how much to put in an emergency fund, but it should be proportional to your income, expenses and outstanding debts. 

"If the interest rate [or balance] on debt owed is high, then you should really focus on paying that debt down while still building an emergency fund, albeit smaller," said Susie Moore, life coach and author of Let It Be Easy. "If the rate is relatively low, then having a bigger emergency fund runway will allow you to make more pragmatic decisions." 

Given the number of wildfires, snowstorms and other natural disasters that plagued 2022, it's also worthwhile to review your insurance policies to make sure your home, car and other belongings are financially protected in the event of a disaster.

Creating a will and planning your estate to protect your loved ones is also important.

4. Prioritize wellness 

Financial stress weighed on many of us in 2022: Some 77% of Americans reported feeling anxiety about personal finances, according to a December 2022 poll conducted by Capital One. 

"When someone is struggling psychologically, it can be damaging to their ability to connect to the confidence, creativity and agency that are crucial aspects of building wealth," psychologist Joy Lere, co-founder of behavioral finance platform Shaping Wealth, told CNET in 2021.
"Mental health concerns can interfere with an individual's ability to work and function at his/her/their occupational peak, which has an adverse impact on income generation," Lere said.

There are many ways to manage your stressors in the new year -- such as establishing boundaries, communicating more openly and making sure you take time to recharge. And take advantage of employer- or community-based wellness resources for physical, mental or financial health.

5. Revisit your financial goals frequently

Are you starting a family? Buying a car? Moving to a bigger apartment? Make sure your financial objectives remain relevant to your circumstances and revise them when needed.
Give your budget, investments and savings a double-check sporadically to make sure you're still in a good position to achieve your goals.