New Year, New Financial Beginning: A Guide to Setting Goals and Taking Control

woman making financial goals for new year

The beginning of the New Year is often a time to set resolutions for the year or to feel like you are starting again with a clean slate.  This is no different with your finances.  Use the New Year as a reminder to check in, review your plan and make sure you know your goals for the year.  Whether you are in the midst of a transition due to divorce or loss of a spouse or are moving forward after experiencing something like this in recent years, working through this process can bring you a sense of control and optimism for the year ahead.

Review Your Goals

As you start to think about your financial objectives for the coming year, it’s a good idea to revisit your goals.  Are there any major life changes on the horizon like a move or a job change?  Are your kids heading off to college or turning twenty-six and therefore no longer eligible to be covered by your health insurance?  Or maybe there are circumstances beyond your control that you are worried about, like potential layoffs at your company.  Start by listing out all of these items.  Have you included them in your financial plan or are there updates that need to be made?

It’s also a good time to reconsider your priorities.  Maybe you have been working to aggressively pay down debt, but now it’s at more manageable levels so you want to consider reallocating a portion of those funds to something else.  Or maybe your kids are starting school full-time and so you can use money you were previously paying for daycare to start to build college savings for them.  Life changes every year, especially when you are raising kids, and so things that might have been top priority last year aren’t as important as you look into the new year.

Update Your Cash Flow

Once you have a good understanding of your goals and priorities you can then consider the changes you need to make to your budget.  Start by comparing your actual expenses last year to your plan.  Were they in line or were there items that were much higher or lower than anticipated?  Make sure you have a good handle on the necessities like food and utilities before making changes to discretionary items.

Does your updated budget allow for more retirement savings?  Are you maximizing your retirement contributions at work?  If not, consider increasing it even a percentage point or two.  Little increments over long periods of time can make a significant impact on your future life and you won’t even notice the difference in your paycheck.  If you are already maximizing your work plan, are you able to make an IRA contribution?  Depending on your income level, you can consider either a Roth or Traditional IRA contribution in addition to what you are saving at work.  These contributions may or may not be tax deductible, but they do allow you to get a little more tucked away for retirement.  And don’t forget, you have up until the tax deadline of April 15th this year to make IRA contributions for 2023.

Finally, check in on any Flexible Spending Accounts (FSAs) that you have through work.  Make sure you request reimbursement for any related spending in 2023.  And if your employer allows it, take advantage of any grace period (usually up until March 15th) to use up any unused funds or roll them to this year before they are lost forever.

Consider Your Assets & Debt

The new year is also a good reminder to check in on your assets and debt to see if there are any changes that need to be made.  To start, do you have your emergency fund set up and funded with at least three to six months’ worth of expenses? If not, this is a good time to replenish it.  If you are concerned about anything specific, like a water heater that is on its last legs or a downturn in your business, consider putting even more than the recommended amount aside to handle what may come. 

On the investment side, it’s a good opportunity to rebalance your accounts.  Is your portfolio still in line with the target asset allocation you set?  Last year was a good year for the stock market, so it might be time to take some of those gains off the table and reinvest in bonds so that you aren’t taking on more risk than you intended.

In terms of debt, what objectives do you have for the year?  If you took out a new mortgage in the past year, you likely have a 6 or 7% interest rate.  Based on the Fed’s plans, rates should come down in 2024 so it’s worth keeping your eye out for refinancing opportunities.  If you have nonmortgage debt that you would like to eliminate, create a plan for that.  Start with debt that has the highest interest rates first and then work down the list paying them off one at a time.

Don’t Forget Tax Issues

Finally, it’s also a good time to start thinking about your taxes.  Tax documents will start coming in any day so create a folder to keep everything organized and accessible.  Again, this is a good time to consider any additional retirement savings that might be available for 2023.  If you are a business owner, work with your accountant to determine how much you might be able to contribute to a solo 401k or a SEP IRA.  And as discussed above, make sure you complete any Traditional or Roth IRA contributions prior to the tax deadline.

In terms of your investments, review your unrealized gains and losses and create a harvesting strategy.  If you have carried forward losses from prior years, is there any rebalancing that you need to do from a risk standpoint that you can strategically offset with those losses.  And you if get stock as part of your compensation at work, consider your plan for diversification this year.  What will be vesting when and what is your plan for it?  Do you have any stock options expiring during the year that you need to plan for?  While these events can create large taxable gains, having a plan will allow you to prepare in advance and ensure that you are managing your risk appropriately.

Like anything else that you want to improve in your life, good fiscal management and planning takes some work.  Use the turn of the calendar year as an opportunity to check in with yourself and your goals.  Make any adjustments you need to based on what you anticipate in the year ahead.  Financial planning is not a point-in-time exercise.  It’s an ongoing process, using the best information you have and then adjusting to reality as it happens.  Your financial life is like a road trip.  When you start out, your map may tell you that it’s a six-hour drive, but as you go along, it continuously updates for traffic conditions and detours.  Make the best plan you can as you start the year, and then be prepared to adjust and react as the year unfolds.

If you are interested in learning about how I can help you take charge of your finances as a newly single woman, please contact me at  or schedule a free 20-minute consultation.

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