Yahoo Finance 5 Signs You Should Feel Good About Your Finances as 2023 Ends
Most people make New Year’s money resolutions to right self-inflicted financial wrongs committed during the past year — they overspent, got into debt, underperformed at work, etc. But not everyone is starting 2024 with their financial ship taking on water.
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A new GOBankingRates survey of more than 1,000 adults found that nearly half the country, around 44%, feel good — or at least pretty good — about their financial well-being at the end of 2023. Almost one in three say their financial situation is good but that there’s still room for improvement. Another 12% say that things have never been better.
The high-spending, over-indulging holiday season makes it easy to beat yourself, but while you should strive to do better next year, you shouldn’t pass up a chance to celebrate victories, no matter how small they might seem.
If any of the following apply to your financial 2023, you have plenty to be proud of and feel good about, even if you’re resolving to do better in the new year.
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You Took Steps in the Right Direction, No Matter How Small
Most New Year’s resolutions fail because they’re too big and too broad — get out of debt, cut spending by half, double your income, etc.
Goals that are too big to succeed are doomed to fail, but even the tiniest victories can add up to major wins. If you improved your situation even slightly in 2023, you’ve built momentum and laid the foundation for a successful 2024 and beyond.
“People can find satisfaction and pride in a variety of accomplishments,” said Brianna Beski, a financial advisor with Raymond James. “Even if people are making small steps on their financial journeys, they can view these as gifts to their future selves in making their financial position more stable for the long term.”
Examples of baby steps with the potential to become giant leaps include:
Creating a retirement fund with a small initial deposit
Working toward improving your financial literacy
Meeting with a financial advisor to craft a strategy for moving forward
Consolidating high-interest credit card debt through a balance transfer or personal loan
Crafting a budget, tracking your expenses and developing a monthly spending plan
Read: 10 Healthy Habits of Happy People To Adopt That Will Ultimately Lead to Wealth
You Paid Down Debt
Rising prices forced people to borrow more just to get by in 2023. According to the New York Fed, total household debt increased by $228 billion in the third quarter alone. But with interest rates at 20-year highs, all that new borrowing could haunt them for years.
If you got through the year without adding toxic debt to your financial profile — or better yet, if you chipped away at some you already had — you have plenty to brag about heading into the new year, when rates are expected to fall.
Jake Hill, CEO of DebtHammer Consolidation, added, “If you paid off some of your debts in 2023, you should be proud of that accomplishment going into 2024. Paying off debt can have a significant, positive impact on your financial health by giving you more available funds for other money goals.”
He continued, “Even if you still have more debt to resolve this coming year, it’s important to acknowledge and celebrate the progress you have already made on your way to a debt-free life.”
You Got in the Habit of Saving Consistently
The three keys to saving are time, compounding and consistency — the third one is your job, and if you socked away even a modest sum of money on a regular basis, then hats off to you.
“As the year concludes, individuals should feel accomplished if they’ve managed to save a consistent portion of their income, regardless of the amount,” said Dennis Shirshikov, the head of growth at real estate investing platform Awning and a professor of finance, economics and accounting at the City University of New York.
Shirshikov added, “It’s not just about the figures in the savings account. It’s the discipline of regular saving that counts. For example, someone who saves just 5% of their monthly income consistently has achieved a significant milestone. This discipline lays a foundation for future financial stability, much like building a house from the ground up. It’s the consistency and quality of bricks laid over time that creates a sturdy structure.”
You Saved Money for an Emergency
Traditionally, experts advise saving three to six months’ worth of income to protect against job loss, a medical emergency, car and home repairs or any other crisis that only cash can solve. But in the post-pandemic era, many have revised it up to nine months’ or a year’s worth.
If you didn’t put away enough to survive nine, six or even three months without a paycheck, don’t worry — as long as you put away something. If you started building even a modest emergency savings reserve, you have reason to celebrate.
“Establishing an emergency fund brings a welcome peace of mind knowing you can better weather unexpected expenses down the road,” said Malcolm Ferrante, an ACCA-accredited expert specializing in international finance, investments, and taxation as the head of the Investment Migration Unit at CSB Group.
“Reaching the symbolic milestone of financial independence is profoundly gratifying too, empowering you to work on your own terms.”
You Created an Estate Plan
According to the Caring.com 2023 Wills Survey, two out of three people do not have an estate plan or even a basic will in place. Some said they didn’t have enough money for it to matter. Others said they hadn’t gotten around to it. Others simply didn’t want to confront the issue of their own mortality.
No matter the reason, leaving that final loose end untied is almost certain to cost your children or other heirs money, time and emotional stress as a court tries to sort out what your wishes might have been during the long and expensive probate process.
Renee Fry, CEO of estate planning platform Gentreo, said, “Check the box and get your estate planning done. It’s now easy and affordable with online solutions that allow you to do your planning in as little as a half hour.”
Fry added, “Most everyone knows they need to do their estate plan to protect all they love, so before the year ends, complete the documents like your will or living trust. Know that you took the steps to help all who you love when they might need help the most.”
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This article originally appeared on GOBankingRates.com: 5 Signs You Should Feel Good About Your Finances as 2023 Ends
