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Financial Tweaks for 2023

Faith & Finance with Rob West | Jan 14, 2023

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Show Notes

You’re hoping that 2023 will be a better year for your finances than last year, but how can you make that happen? You don’t have any control over the national economy, but you have a great deal of control over your own economy. In today's Faith and Finance Rob shares the steps to strengthen your financial condition, and give you peace of mind in the bargain.

  • The number one thing you should do in 2023 is get out of debt. With today’s higher interest rates, you’re paying even more to carry balances on credit cards.
  • Use the snowball method to pay off those cards. Prioritize them by smallest to highest balance. Pay all the minimums and use any extra funds to pay more on the smallest balance. When that’s paid off, use extra funds to pay off the next smallest, and so on.
  • You’ll need to be on a budget to determine how much extra cash you have to pay down your debt. Spending without a budget is like a circus performer working without a net. So if you don’t have a budget yet, download the FaithFi app. It’s got three different ways to set up your spending plan - one will be just right for you. Download it at FaithFi.com.
  • Another great financial tweak for 2023 is to start or increase your savings. We don’t know what lies ahead for the economy, but having an emergency fund will help prepare you for anything.
  • A 2022 survey by YouGov showed that 49% of Americans couldn’t cover an unexpected bill of just $400. That was a big jump over the previous year, probably due to higher interest rates and inflation, so it’s vital that you start putting away something from every paycheck into a savings account.
  • Start with a goal to save $1500. Then keep going until you have 1 month’s living expenses, and don’t stop until you have 3 to 6 months living expenses saved up in your emergency fund. That covers your short-term saving needs.
  • But you also have long term savings needs - retirement investing - for when age or health prevents you from working. So another great financial tweak for 2023 is to make sure you’re at least maxing out any matching contributions in your 401k. If you want to go further, you can contribute up to $22,500 to a 401k or 403b this year.
  • If you have an IRA, either traditional or Roth, you can contribute up to $6,500 in 2023, and an extra $1,000 if you’re over age 50.
  • Here’s another way to improve your financial condition this year: Improve your skill set by taking web courses. Online learning exploded with COVID and it remains easier than ever to get professional certifications and specializations - even under-grad and master’s degrees - without leaving home and often at a fraction of the cost of in-classroom programs.
  • If you’re looking for a career change, there’s an increased demand for tech talent so schools are offering a lot more options for computer programming and coding classes.
  • So those are all offensive tweaks you can make to improve your finances in 2023 - but what about defensive tweaks? And by that we mean protecting yourself from fraud and identity theft. One way to do that is by signing up for transaction or account alerts with your bank and credit card issuer.
  • You should be able to do that online. Once you’ve logged into your account, look for security settings and select the “transaction monitoring” option. The system will then text or email you whenever money is taken from the account, and you can take steps to minimize the damage if fraud has occurred. The card issuer will investigate any false charges and remove them from your account.
  • You can also put a freeze on your credit at the three reporting bureaus: Experian, Transunion and Equifax. That will prevent thieves from setting up new accounts in your name by blocking credit checks. It’s free and easy to do, but you have to do it at each of the three bureaus individually.
  • And while you’re doing that ‚ it’s also a good idea to get your credit reports. You can do it for free once a year for each bureau at Annual CreditReport.com. We like to stagger them, getting one every six months.
  • Now when you do that, look for any errors or suspicious activity. If you find anything, the bureaus all offer you a way to dispute those transactions online. The bureau will notify the creditor about your dispute and they have 30 days to resolve it or it gets dropped from your report. You can do that for free at AnnualCreditReports.com.

On this program, Rob also answers listener questions:

  • What is the purpose of work (working for a living)?
  • What is an ideal amount to have saved in a 401k at age 48?
  • How can you move money from a 401k into a Roth IRA, and would that make sense?
  • How do you determine what to do with your money after becoming debt free?
  • What is the best way to learn the basics of budgeting and managing money?

RESOURCES MENTIONED DURING THIS PROGRAM

Remember, you can call in to ask your questions most days at (800) 525-7000, email Questions@FaithFi.com, or visit our website, www.FaithFi.com where you can join the FaithFi Community, and download the free FaithFi app.

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