According to Fidelity Investments’ latest study, more than a third of respondents say they’re in a worse financial situation than the previous year. Only 65% believe they’ll be better off in the coming year compared to 72% in the last study.
The past year was notable for its challenges, with the highest inflation in decades, rising interest rates, and the lowest US personal savings rate since 2005. Many fear a recession in 2023.
Be Optimistic For The Future
As we move into the new year, it’s an excellent time for a fresh start, making financial resolutions to strengthen your finances to help you save more, pay off costly debt, and build wealth.
1. Set Financial GoalsThe top of our list is to revisit your financial goals at the beginning of the year. You have a better chance of realizing your goals when you set reasonable and specific ones that pertain to your needs.
2. Create A Budget Or Track SpendingTo be financially disciplined, you need to understand how your monthly budget works so you can make improvements where needed. Your budget combines your actual income sources, less total expenses (fixed and variable expenses), and equals the bottom line.
By spending less than you earn, you should have more savings to replenish your emergency funds, pay down debt, contribute to your retirement savings, and invest more.
4. Create or Replenish An Emergency FundHaving savings on hand for emergencies should be a top financial goal. Create an ample emergency fund to cover your necessary and urgent living expenses for up to a year.