By Amy Miller, AFC®
I think we can all agree that the financial market has been a bit of a roller coaster ride for the last few years. This past year was no exception. Many of us are ready to look ahead and plan for 2023.
Although we should complete financial checkups regularly, the end of the year is always a good time to take stock of where you stand and where you want to be – a bit of a reality check before turning the page on 2022.
Here are a few questions you can ask yourself about your household finances that may help you get a better understanding of your overall situation and what you would like to accomplish so you can adequately plan for 2023.
How was 2022?
A great place to begin is by looking back over the past year and reflecting on what did or didn’t happen.
- What went well?
- Were all your basic needs covered?
- What were your biggest achievements?
- Did you stick to your budget or spending plan?
- Did you meet all your goals?
Doing this can help you better understand what does and doesn’t work for you and help you identify any lessons learned and new opportunities so that you can create a realistic plan for the next year.
Are my Affairs in Order?
Now is also the perfect time to complete any necessary year-end financial “tasks.” These may include:
- Checking your credit
- Reviewing your life insurance policies and beneficiaries
- Preparing tax information
- Taking required RMDs (Required Minimum Distributions) from retirement accounts
- Making additional changes or updates
What are my top financial goals?
A goal is the first step on the path toward achieving what matters most to you and should be SMART.
Start by listing and then prioritizing what you want to achieve. This can include things that you are already working toward and those that you haven’t started just yet. As you identify each goal, rank it in order of importance. Write down specific details about each one and create timelines. This will help you understand what is needed to meet each goal.
How Can I Accomplish my Goals?
Once you know what your goals are, you then need to think about what it will take to achieve them. We all know that includes focus and dedication, but we also need to consider what exact and deliberate actions will be needed to succeed.
Hard work, written plans, and budgets are typically thought of first, and while these are paramount to being successful, none of these are possible without a positive mindset.
Success in meeting our goals comes down to being positive and focusing on good habits. Many of us may listen to the opinions of others or hold on to negative mindsets due to past experiences. This can shift our thinking and our actions and limit our belief in ourselves.
Having a positive attitude and outlook is the best way to drastically increase your chances of success. Our mindset is truly the determining factor of the amount of effort we will put forth and the actions we will take. You must believe in your goals and look for the positives – this reinforces that your dreams can come true.
Stephen Covey said it best –
“When you change the way you see things, it influences what you do and the results you get”. Therefore, if you change how you look at your goals, your behavior will lead to your desired results.
In contrast, a negative mindset tends to result in negative actions and negative outcomes.
Planning for 2023
This time of year represents an opportunity to reassess your overall financial situation, while thinking and planning for your future and the people you care about the most. Asking yourself these questions and working to prioritize what you want to accomplish while having the right mindset is key to overall financial health and wellbeing.