5 Simple Financial Goals To Achieve in 2023

5 Financial Goals to Achieve in 2023

Now that the new year is about to start, it’s that time where a lot of people like to set goals or resolutions for the upcoming year. Most of these goals revolve around health and fitness, careers, relationships, learning a new skill or working on their finances. 

Whilst it’s great to outline what you want to achieve in the new year, it’s more important that you follow through on what you set out to achieve. How many people have set new year’s resolutions or goals only to have abandoned these a month or two into the new year? 

A problem that many people have when setting goals is setting goals that are too hard for their current situation or ability, i.e. aiming to run a marathon when you haven’t broken into a run in years! Be honest about your starting point, set realistic goals and take action!

For those who’s financial situation isn’t great, now is the time to turn this around. The worse your finances the longer it takes however the quicker you start on this the quicker your situation can turn around. With that in mind let’s outline 5 financial goals in 2023 that you should look to achieve to change your financial fortunes.

1. Set financial goals and Take Action

It’s amazing the amount of people who are surveyed about their upcoming new year’s resolutions/goals who state they wish to improve their finances but don’t actually do anything or any effect they undertake is a token at best!

These people think that their finances will magically improve on their own. 

Your financial situation is very important and deserves the relevant respect. This goes double if your financial situation isn’t great. If this is you, know your exact starting point and set goals to improve your financial situation. 

Most importantly take action. 

2. Get on top of your bills using a financial audit, a budget and financial automation

Now that you’ve set up your financial goals let’s find out exactly how bad your financial situation is. Any journey needs a starting point, let’s find your financial start point. We suggest you undertake your own personal financial audit where you outline all your current debts (and their interest rates if applicable), all your monthly repayments, your current expenditures, all household income that you receive and any assets that you own. 

Then outline your new budget that will (hopefully) enable you to save money every month, repay debt and eventually invest to build your net wealth. 

Once you have this it’s time to create a budget, one that is sharp enough to enable you to pay your bills, repay any creditors, build your emergency fund then build savings and investments. Your lifestyle expenses (at this stage) should be rather lean (the worse your financial situation, the leaner it should be). Once you’ve gotten on top of your bills and have built your emergency fund then you can look at increasing your lifestyle expenses however always maintain the financial discipline where you are continually adding to your savings and investments. 

We’ve discussed previously the importance of setting up an automated financial system where your pay goes into a bank account and all regular bills are debited from this account and any (hopefully) surplus (after building your emergency fund) is transferred to a higher interest savings account. This is one of the big tips that has helped us improve our financial situation and build our levels of savings and investments. 

Once you’ve gotten on top of your regular bills and have several months of savings this will boost your confidence and encourage you to expand your financial goals.

3. Build your emergency fund

We touched on emergency funds in the point above. There are countless surveys where a large percentage of the population live paycheck to paycheck and have little to no savings. We don’t want this to be you. As we touch on below, a higher income will obviously alleviate financial stress however increasing income often leads to higher spending so we always recommend maintaining discipline with your expenses. 

Once there is a surplus your first step should be to build an emergency fund. This can be anything from 1 month to over a year’s worth of lifestyle expenses that you have saved. We recommend at a minimum you have 3 months of lifestyle expenses saved, ideally it will be a year’s worth. 

The amount of confidence that comes with a substantial emergency fund is paradigm changing. 

Building your emergency fund won’t come easy but is possible with hard work, focus and financial discipline. 

4. Increase your income

This can be selling excess household items, renting out unused assets or equipment, you can get a pay rise or change jobs or you can take on a 2nd job. This 2nd job could be something simple as cleaning someone’s house or doing gardening or you could use a skill or talent that you have to earn extra money that could even turn into a new business. 

Whilst cutting back your expenses is one way to boost your household surplus (a healthy budget is always recommendeD) to really make a significant impact on your savings and financial position you want to improve your income. 

Whilst the economy may not be in the best shape there is no reason why you can’t earn more money. This could be approaching your boss with a detailed outline of why you deserve a raise or you could take on a new course or training to get a pay rise or even a promotion. 

You could start an online business or a side hustle that grows to replace your current job. With the internet there are so many more ways to increase your income, have you tried? 

5. Start investing

After you’ve ticked the boxes above and you have an emergency fund and savings you should be looking to invest. This could be anything from buying shares to building your own online business. Start small, get comfortable and keep building. Eventually you will want an investment fund that is well diversified so if one sector has a downturn your invest income or performance won’t be affected as much. 

Learn everything you can about investing and don’t let any lack of knowledge put you off investing. Sure just dip your toe in initially if your investment knowledge is limited however don’t let this hold you back. Find successful people who have achieved what you want to achieve or invested in ways you’d like to invest

Be careful with the amount of risk you are willing to take and NEVER INVEST MORE THAN YOU ARE WILLING (OR FINANCIAL ABLE) TO LOSE. Also make sure that every investment you make stands alone and if it performs badly has no serious affect on your financial wellbeing. You’d hate to build up a nice investment portfolio only to see this wiped out by overleveraging or going all in on an investment that wipes you out, undoing all your previous good financial work. 

You will likely also want a mix of investments that are either focused on income or growth (some may have both) as eventually you will want your investment portfolio income to match and exceed your current lifestyle expenses

There is no reason why you can’t turn your financial situation around. The worse your situation the harder it will be however the sooner you start, the quicker you will be better placed financially. Take action in 2023 and it won’t be too long before you question why you didn’t do this sooner.