10 financial care tasks to consider for a brighter 2023

Happy 2023, dear reader! My hope is that we have a very calm and gentle year ahead of us, full of steady progress toward a more joyful life and a better world for everyone.

In that spirit, I’m not setting particularly lofty goals at the moment. Winter is a tough time to start things — there’s, like, ten minutes of sunlight and everyone has a cold/flu/RSV/some secret fourth thing. So we’re not about those hardcore resolutions over here. But…

The hush of winter is an excellent time for contemplation, reflection, and quietly laying groundwork for the things that you’d like to do as the wheel of your year turns toward the growth of spring.

In that spirit, here are some helpful financial care tasks to consider putting on your list of things to do in 2023… and some of them are fairly easy wins, if you happen to be in need of an easy win (no? just me?). We make better decisions when we have better information, and many of these ideas are geared at helping you understand your money life just a little bit better.

If you already do any or all of these things, high five! Look at you out here being awesome! If not, trying even one of them is a positive step towards real financial resilience.

Without further ado:

  1. Check your credit report.
    • If you aren’t using a credit monitoring or ID protection service and/or would like ongoing credit reviews that are free and easy, you can access this information for free through creditkarma.com. (This is not sponsored; they’re just a solid service and it’s nice that it’s free.)
    • You can also run your credit report here with at least one, ideally all 3, of the credit bureaus – and you can still run those reports even if you’ve frozen your credit.
    • It will not hurt your credit score to check your own credit — checking your own credit is considered a “soft” inquiry (or “soft look” or “soft pull”) because it’s not related to you trying to get a new credit product, and soft inquiries do not affect your credit.
    • When you run your report, you should check to see if there are any accounts you don’t recognize. We have guidance in our post here on protecting your credit file and disputing fraudulent accounts.
  2. Inventory all your accounts.
    • If you did #1, you’ve got all your credit accounts — and their balances — already pulled up for you. You also want to add checking, savings, online savings, retirement accounts, brokerage accounts, kids’ college funds, all of it.
    • If you have a long-lost retirement account from an old job and you’re not sure where it is, you can DIY the search, or use a service like Capitalize to help you find it. (Not sponsored, but free and very well-reviewed.)
    • Once you do this, you can use the list to tally up your net worth, which is the total of all your assets minus the total of all your debts.
  3. Check all your account beneficiaries to make sure they reflect your current wishes.
    • If you did #2, this one shouldn’t be too hard to check and update if needed.
  4. Review or create your estate plan.
    • If you’re over 18, don’t leave it up to the government to decide where your stuff goes. If you think “I’m married so it all just goes to my spouse, right?” that may not be the case, depending on the state where you live (North Carolina is complicated!) as well as any states where you own property. Every adult needs a will.
    • If your estate plan hasn’t been updated in 10 years (or since a major life event), or if you don’t have one at all, make this the year! A good estate plan will include a will, a financial power of attorney, a health care power of attorney, and an advanced health care directive (you may have heard this called a “living will”), and may also include a revocable living trust or additional powers of attorney.
    • There are a number of cost-effective options to set up an estate plan online, such as Trust and Will or NetLaw, and those services offer affordable attorney support add-ons as well. However, if you decide to invest in the professional expertise of an estate attorney, it is typically a one-time expense, as many will do updates free of charge.
    • If you’re on military active duty, you probably know that the JAG that supports your unit/base can do your estate plan. This is also true if you’re in the Guard or Reserves, as well as if you’re a dependent!
  5. Evaluate your tax withholdings and adjust if needed.
    • In the next several months, we’ll all be gathering our tax returns and finding out whether we owe or get a nice refund. This will be a great time to revise your withholdings based on your 2022 info and any changes you anticipate this year.
    • More on this here.
  6. If you aren’t sure what your monthly expenses are, do a 3-month spending audit to get a ballpark number of what it costs to be you every month.
    • This means pulling up statements (or exporting CSVs) for the accounts that you use for regular spending, identifying major recurring expenses, and then sorting your other spending into buckets that make sense for you.
    • If you’re spreadsheet-friendly, a CSV export + pivot table can do all the hard work for you; you just need to assign some categories. (Also, this is a service I provide for clients who need someone to help get the ball rolling!)
    • If you’re a pencil/paper/calculator person, it can be a labor of love, but it’s worth it.
    • And if you don’t really want to do either, may I suggest that…
  7. If you haven’t already found a money-tracking platform or method that works for you, pick one to try.
    • I am a Mint stan because I have been using it for almost nine years and we’ve basically entered into a symbiotic relationship. Also, it’s free! It’s not perfect; I think they could get a little more AI up in their auto-categorizations to save us all some time, but it’s been a key part of the Fortuna household’s success. (Again, not sponsored, just free and I like it.)
    • However, as I’ve said before, money-tracking/budget methods are like sunscreen: the best one is the one you will actually use. We have more suggestions here.
  8. Identify your retirement savings target.
    • There are a few ways to figure out what your retirement savings target should look like. Fidelity by way of Forbes suggests the following:
      • Age 30: 1x your current annual income
      • Age 35: 2x your current annual income
      • Age 40: 3x your current annual income
      • Age 50: 6x your current annual income
      • Age 55: 7x your current annual income
      • Age 60: 8x your current annual income
      • Age 65: 10x your current annual income
    • If the number you come up with feels terrifying based on where you’re at right now, don’t panic. This is a rule of thumb, not a law of nature, and it assumes an “average” retirement age of 65 and that an individual’s annual income is pretty close to their annual expenses. People who are happy to keep working, who are eligible for additional benefits, or who can easily live on much less than their current income can use somewhat lower targets; people who want to retire earlier, or who rely on a lot of borrowing to finance their current lifestyle, will likely need higher targets.
    • If you’d like a more tailored solution, a simple retirement calculator like NerdWallet’s or a slightly more complex one like BankRate’s can give you a bit more clarity on your personal situation.
  9. Decide to treat your credit cards like debit cards.
    • If you have credit cards and aren’t currently carrying a balance but find that you often do, commit to using your credit like debit in 2023. This means choosing to spend only dollars that you actually have in your bank account/budget. (If you decided to do #7, that spending tracker/budget tool should make this a bit easier.)
    • If you have credit cards and are currently carrying a balance that you don’t want, consider a short credit fast and switch to using only a debit cards while you pay the balance down.
  10. Commit to your generosity practice.
    • If there is something that matters to you in this world, some problem or crisis or dream that tugs at your heart strings, you can create an impact. Commit (or affirm your commitment) to giving time, money, or other resources in a way that fits your wallet, calendar, and heart.
    • Although helping others is a beautiful thing, generosity isn’t just good for the recipient. It’s also an incredible mindset shift for you, the giver: it’s a statement of belief that you have enough to share, and it reminds you that you have the power to show up for your values in a real way. We have more on this here!

If any of these resonate with you, I’d be delighted if you dropped a comment with which number(s) you plan to add to your 2023 to-do list. I’ll go first: #4, for sure. Mr. Fortuna and I need to review and update our estate plan, and we probably will also take a look at #5 and get our withholdings dialed in for the new tax year.

Your turn, and happy New Year!

Header photo: by Simon Berger on Pexels.com

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