There is something about the expectation of a new year that inspires imaginative and loftier goals. Though I am not particularly fond of making new year’s resolutions, I am not surprised that goal setting for the new year often involves setting our sights on new habits, milestones, or accomplishments. From exercising regularly to spending more time with family – the goals that we set in anticipation of a new year are often more than a box to check on a list, but a desire to change certain aspects of our lives. So, it is not surprising that most people focus on improving their financial standing for the new year. Here at Servet Wealth Management, we are elated that so many people use this time to gain clarity on their financial goals for the new year, and we aim to make this process easier by creating a space for financial advisement and insights to be accessible. While helping clients with increasingly complex financial planning scenarios for over a decade, I have noticed that the most recurring question is “How should I get started?” If you ask this question about your financial journey, my aim is to share insights and stories that will help you make informed financial decisions.

Here are some great ways to start the year if you are thinking about where to start in your personal finances for 2023:

1. Review Your Budget

• The first step in financial organization is to take stock of where you currently stand. Review your income, expenses, and savings to assess your present financial situation. Are you currently saving money each month? Do you have outstanding debt? Do you track your spending? How can your spending be improved so that you can hit your financial goals? Answering these questions will help you create a realistic budget for the upcoming year.

2. Set Financial Goals

• Now that you are aware of your financial standing, you move forward with setting your goals. Do you want to pay down your credit card?Save for a downpayment on a home? Build an emergency fund? Whatever your goals may be, make sure they are SMART: Specific, Measurable, Attainable, Relevant, and Time-bound. SMART goals incorporate these criteria to keep you on track and increase your chances of achieving your goal.

3. Create a Plan

• With your budget and goals in place, it is time to create a plan based on your financial standing. If you are struggling with debt, it would be in your best interest to cut costs. Some methods of doing this include canceling subscriptions and memberships or even eating out less often. If you would like to invest more, start with automating money going into your 401(k) or start a monthly transfer into a savings or investment account.

4. Stay on Track

• It is important to remain disciplined with your financial plan even though you may be tempted to spend frivolously. To stay on track, habitually review your plan and adjust when necessary. Consider recruiting an accountability partner, having someone to remind you of your financial goals will push you to be consistent. Also, remember to celebrate the small wins as you achieve your set goals.

5. Build an Emergency Fund

• An emergency fund is necessary in preparation for a rainy day. Emergency funds supply financial security in case of unexpected expenses such as car repairs or medical bills. It is a promising idea to have a minimum of 3-6 months' worth of living expenses put aside. With the present rise in interest rates, moving your emergency funds into a high-yield savings account would be beneficial. Keeping your emergency fund in a separate high-yield savings account allows you to easily keep track of your money while earning extra interest on your deposits.

6. Review your insurance coverage

• It is beneficial to review your insurance coverage annually to ensure that you are appropriately protected. You should also review your coverage after making a major purchase or a significant life event, such as getting married, buying a home, or receiving an inheritance. These life-changing events are considered insurance-qualifying, so it is important to make sure your coverage is up to date to protect the people and things that matter most to you.

7. Get and stay organized

• Having a dedicated place to track your expenses and tax information can give you an exact picture of where your money is being distributed. From spreadsheets to mobile apps there are multiple methods of tracking expenses for you to choose from. Regardless of your chosen tracking method, you must refer to your transaction history easily and reliably. Aim to log your expenses daily, weekly, or biweekly.

8. Seek professional advice

• If you are unsure of the steps needed to begin your financial journey, seeking a financial planner can be helpful. Servet Wealth Management is more than happy to offer our services by reviewing your investment strategies, retirement planning, insurance, and other financial matters so you can achieve your financial goals with confidence.

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