Client Question – Start of Year Considerations

January 5, 2023

Happy 2023! I realize we are only a few days into the new year. Perhaps you’re still writing/saying 2022, taking down holiday decorations, working on your new year’s resolutions, or struggling getting back into your routine after a nice vacation. All of those are understandable – go easy on yourself!

However, if you are all ready to dig into the new year, you may be like my client that asked what she should be thinking of in the first few months. Here is a list of five items I shared to jumpstart your 2023 financial journey!

  1. Finalize 2022 Taxes – I know we have until April (October if we extend). However, I am one who prefers to get these done sooner vs later so I can know where I stand for the prior tax year before fully embarking on a new one. Whether you work with a preparer or do your taxes yourself, start gathering the required information. Some items (like various 1099s) will take a month or two to come in – but you can still get a good handle on many other items now. Getting your taxes in order will also allow you to determine if you can further fund certain accounts (Roth IRAs, IRAs, Health Savings Accounts, etc)
  2. Adjust 2023 savings for new limits -The limits for various retirements accounts have increased in 2023 (one benefit of inflation!). If you wish to max out this year, you may need to adjust your payroll contribution on your 401k website – or adjust your monthly deposit to your IRA to meet these new limits.
  3. Review your investment portfolio – After a year like 2022, you would perhaps prefer to not look too closely at your investment statements. However, it’s important to stay on top of your invested assets – no matter what. If you work with a financial advisor, they will be preparing reports for you to accomplish this review. If you don’t, consider putting together a consolidated target vs allocation analysis and a listing of your holdings (to determine sector exposure and any concentrations). Review and make any necessary adjustments
  4. Track your budget for at least one month – Very few people I meet enjoy budgeting. However, I think it can be a very powerful exercise to teach you more about how you spend (and where you could perhaps increase savings). Start small. Consider tracking spending for a month or two. See how it goes – maybe it will be your new favorite activity in the new year!
  5. Make a 2023 financial action item list – I know. You probably have too many lists on the go already and you can make changes any time, not just at the start of a new year. I get all that. And even so, there is something to be said about how our brains attach to a calendar year. So take advantage of that innate motivation and make some quick changes in 2023. Pick one or two things related to finances you want to tackle this year (big or small). Write them down – and do your best to check them off. I’m going to review and/or negotiate all recurring charges (think cable, streaming channels, amazon subscribe & save items) as well as make some modest updates to my estate plan.

There you have it. A few ideas to get you started in the new year. Let’s make this a great year – financially and otherwise!

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