4 things you should do with your money before 2023

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Here are some moves that may help prepare you for a financially successful year.


the main points

  • We’re still a few months away from the new year, but it’s a good time to take stock of your financial situation.
  • A few money moves can give you a head start in improving your financial health in 2023 and beyond.
  • Starting an IRA or getting rid of your debt are just some of the financial tips you should follow.

We’re still a few months away from the end of 2023, but you don’t have to wait until the New Year to take steps to organize your financial life. Here are four smart financial steps to start thinking about now, that could put you on the path to better financial health in 2023 and for years to come.

1. Maximize your savings

As you’ve probably heard on the news, so was the Fed raise interest rates vigorously to try to control inflation. And you might think that this should translate into a higher return on your savings account — but you could be wrong.

According to the FDIC, average annual return, or APY, on a US savings account is just 0.17% as of September 19. Now, that’s more than it was a year ago, but not as much as you might think.

Fortunately, there are some banks that pay a lot more than the national average, especially those that rely on the Internet. As of late September, some of the Preferred High Yield Savings Accounts It has APYs in excess of 2%. If your savings account is at a branch-based organization, now might be a smart time to make a change.

2. Start an IRA, or add to one

For 2022, Americans can contribute up to $6,000 ($7,000 if they are 50 or older) to their individual retirement account, or IRA. With the stock market significantly lower than its highs, now might be a smart time to invest for your retirement by opening a new account IRA . account Or add to an existing list if you haven’t reached your maximum contribution limit.

Alternatively, if you have a 401(k) or similar retirement plan at work, this might be a smart time to consider increasing your contribution rate. Most financial planners (myself included) suggest that Americans should aim to save at least 10% of their income for retirement, so perhaps increase your savings rate by a percentage point or two before the end of the year.

3. Check account

One smart exercise to do more often is to print the last two months of your bank and credit card information To perform a spending check. Look for expenses you could have made without it, subscriptions or memberships you don’t use, and other ways you can save money without negatively impacting your lifestyle. The last time I did, I realized I was spending twice as much eating out as I was comfortable, and I found a $38.99 monthly online newsletter subscription that I hadn’t used in months.

4. Make a plan to attack your high-interest debt

Many people are not aware of this, but you Credit card interest rates Not only high – hmm Worker. And it’s directly related to the Fed rate hike I’ve heard about. In the current rate-raising cycle, the Fed has raised benchmark interest rates by 300 basis points (3%), and your credit card interest rates have risen by the same amount. In other words, if your credit card’s APR was 16.9% at the beginning of 2022, it will likely have risen to 19.9% ​​now.

The point is that if you have credit card debt, it is now important to make a plan to control it. You may look in a file 0% APR for Balance Transfer Show. Another option could be a file personal loan With a significantly lower interest rate and a fixed repayment date. After all, the less interest you pay, the more of your payments will go to the disposal of principal.

This is not an exhaustive list

There are plenty of smart financial moves you can take that I haven’t listed here, and not all of them will apply to everyone. But the point is, in the uncertain economic times we live in, it’s a good idea to take a step back and assess how you can maximize your financial well-being, now and in the future.

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