Eyes On
Future You
There are only 15 days left in 2022, which is a great time to review your finances. Because a little planning now can go a long way in helping Future You hit your money goals. Set yourself up for financial success in 2023 by checking in on your finances and making some low-lift money moves now that will pay off later.
Your move:
Lower your taxable income. Max out your 401(k), look for deductions (hi, home office), or make a donation to your favorite charity.
Start a sinking fund. Planning a vacay for next year? Budget for how much you can save each month, and start stashing it ASAP.
Boost your emergency fund. Open a high-yield savings account and use extra cash, like your holiday bonus, to bolster your savings.
Review your spending. Look at your credit card statements from 2022. Where did you spend the most? Does that align with your financial goals? If not, start fresh, and create a new budget for 2023.
Related
Money Tip of the Week
Lower your bills.
Did you know you can negotiate some of your bills?Think: Your phone, internet, and even credit cards.And you can save A LOT of money in the process. Start by researching competitors to see what they’re charging their customers for the same service. If it’s cheaper, ask your current service provider if they’ll match it. If they won't, consider switching to save some extra $$$.
Financial Goal Unlocked
The Goal: Decide on an investment strategy.
A Winning Mindset: Despite what the Boomers in your life might tell you, cutting back on lattes and avocado toasts won’t make you a millionaire. Enter: Investing, aka the real key to building wealth.
A Winning Strategy…
Know your goals. Want to retire early? Fund your kid’s education? Knowing what you want to accomplish (and when) can give you an idea of how much risk you’re willing to take on and which investment strategy is right for you.
Weigh risks vs. rewards. Investing is inherently risky, but some investments are riskier than others (think: individual stocks or real estate). While lower-risk investments (think: bonds, mutual funds, or CDs) can be more stable, they might not rise as much during the good times.
Pick your account(s). 401(k)s, Roth IRAs, and brokerage accounts are just a few of the investment accounts you can choose from. Each has its pros and cons. Choose the one that aligns best with your goals.
Know the costs. Whether it’s brokerage fees or taxes on realized gains, investing can come with costs. Get an idea of what you may owe before making any investment.
theSkimm
Investing is a crucial part of building wealth. Before you begin, you need to pick a strategy that matches your financial needs, goals, and level of risk tolerance. Bonus points for deciding on a plan, then setting and forgetting your investments.
And Also This…
What’s on its way up…
Interest rates (again). But only by 0.5 percentage point this time. The increase brings the Fed’s benchmark rate to 4.25% and 4.5%, its highest in 15 years. The Fed is expected to continue raising rates in 2023 in an effort to bring down inflation, but more cautiously than before.Which might be good news for prospective homebuyers, who could expect interest rates on mortgages to keep falling.
What’s bringing good tidings…
The latest inflation report. Consumer Price Index data for last month came in lower than expected, and showed that the price for used cars and the rate of inflation on food prices is trending downward. The CPI — which measures the average change in prices for various consumer goods — rose just 0.1% since October and7.1% from a year ago in November, the smallest increase in almost a year.
Who’s having an “Emily in Paris” moment…
Who’s giving out gifts for free…
Skimm’rs
Tell Us How You Really Feel: ‘Tis the season to reflect on your money Ws and Ls, but especially the Ws. What financial goals did you hit in 2022? Tell us all about it here because we want to celebrate with you.
Last week, we asked you to share your money goals for 2023. Here’s what you told us…
“2023 is the year for investing in my financial future. I contribute to a retirement account, but I haven't prioritized it as much as I want to. I really want to focus on cutting down expenses and spending, and focus on getting funds in savings, CDs, or investments since rates are good there, and not spending on unnecessary items (lifestyle creep).” — Rizzi C, Alliance, NE
“Now that I have the budgeting and investing basics done in 2022, I want 2023 to be the year I level up my knowledge about what my money can do for me and how to make it work. Max out my Roth IRA, make sure my investing portfolio matches my financial goals, and look into diversifying my assets (is real estate, bonds, etc. for me?). — Catherine A, New York, NY
"I want to save $40,000 this year, about $800 a week. I’m young and know that compound interest is my best friend, I need to be diligent and take advantage of having the time!” — Melanie H, Chicago, IL
Answers have been edited for length and clarity.
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