7 Money Resolutions for 2023

Every December 31, millions of people resolve to make smarter choices in the new year. One of the top resolutions is, “I will get my finances in order.” Unfortunately, most people don’t actually keep this promise to themselves.

Let this be the year that you make informed, deliberate decisions about your money. It’s a gift to yourself, and to your loved ones, to have better control of your cash. The following seven tactics can set you on the road to a comfortable and solvent future.

1. Track your spending

To find out where your money goes, write down what you spend for an entire week. Use a spreadsheet, a budgeting app such as Mint, or plain old pen and paper. Now: Do it three more times, and you’ll have a month’s worth of spending data to examine.

As a species, humans have a comfortable amnesia about how much we spend. For example, maybe you took your grandchildren to a Saturday movie and then hit the ice cream parlor afterward (even though you’d already dropped $30 on popcorn and drinks). But you’d probably forgotten all about that.

Or maybe you took your vehicle to the car wash, where you impulsively added spray wax, undercarriage cleaning and interior conditioning to the tab. It cost a lot more than you’d planned, but your ride looked great!

When you’re aware of how money drips away, you can plug the leaks. But setting these limits doesn’t mean you can no longer have any fun. It just means that you have to ...

2. Create a workable budget

Some people think “budget” sounds an awful lot like “deprivation.” On the contrary: Having a budget means you can have all kinds of nice stuff—because you’ve planned for it. In fact, a popular budget plan allows you to use almost one-third of your after-tax income just for the things you want.

The 50/30/20 budget suggests that no more than 50% of income goes toward necessities (food, shelter, utilities, taxes), 30% for “wants,” and 20% for savings and debt repayment. Make a list of all essential expenses and another list of the nice-to-haves, then apply those percentages.

Note: This is not a set-it-and-forget-it document. At the end of every quarter (or every month), run the numbers to see if you’re staying on target.

Incidentally, having a budget gives you a great excuse to say “no” to someone, or to yourself. But instead of saying “no” outright, phrase it as “That’s not in the budget right now.” Then give yourself a pat on back for using available funds wisely. And keep in mind that “right now” is a reminder that what you want probably will be in the budget at some point.

3. Eliminate unnecessary expenses

Trimming the fat means you can direct your dollars to where they do your household the most good. For example, some people remain a two-car household even though both partners drive a lot less than they once did. Or they spend a lot of money on things they’ve stopped noticing, such as gym memberships, multiple streaming services, subscription boxes and, yes, those darned lattes.

Do a deep dive into the past few months’ worth of credit card bills and automated payments. Be honest about how many of those streaming services you actually watch, or whether you still truly appreciate the subscription box for fancy teas or word games.

As an experiment, drop these services. Chances are your life will go on just fine, and you’ll be saving $40 or $50 (or more) per month, which could mean an extra $600 in your budget each year. And if you decide to become a one-car household, you’ll save a lot more than that in terms of gas, insurance and vehicle maintenance.

Don’t dump anything that makes a noticeable impact on your life. For example, a gym membership is absolutely worth the freight if it makes you feel stronger and healthier. Shop around for the best deal, though, and see if your Medicare Advantage plan includes “Silver Sneakers,” which offers no-cost gym memberships plus online health and fitness classes.

4. Pay down debt

According to the Federal Reserve Bank of New York, the over-60 demographic held more than $3.6 trillion worth of debt as of the second quarter of 2021. Some of that might be considered “good debt,” such as the last few years of a mortgage. In return for those monthly payments, you’re getting a place to live and building equity.

Medical debt and credit card debt, on the other hand, can adversely affect your credit score and, if left unpaid, could eventually result in collections notices and possibly even lawsuits. Plus, paying interest on these debts month after month erodes your financial security.

If you don’t have a plan to pay what you owe, contact the nonprofit National Foundation for Credit Counseling (nfcc.org), which offers practical tips and can also put you in touch with a credit counselor. Since payment is on a sliding scale, the help you receive may cost little or nothing at all.

5. Build an emergency fund

Every household needs an emergency fund: a sum of money set aside for unexpected expenses. The emergency fund should be separate from ordinary savings or from funds set aside for holidays, travel or other non-necessities.

For example, would you be able to cover the cost of a new stove if your old one finally dies? How about a replacement transmission for your car? Or a new, firmer mattress that will ease your aching back?

If finances are already tight, set a simple, achievable goal such as, “I will save $600 over the next 12 months.” That works out to about $1.64 per day. A few minor tweaks to your spending should make that possible. Best-case scenario: You’re able to save that $600 in six months, rather than a year, which should encourage you to keep going.

If finances are really tight, see “16 Easy Ways to Trick Yourself Into Saving” for tips on how to find a bit of wiggle room, even if you think you can’t.

Note: Keep your emergency fund separate from your regular checking or savings accounts, and resist the urge to dip into it for anything except an actual emergency. It’s not a piggy bank.

6. Develop a savings habit

While an emergency fund is essential, it’s important to save for other things as well. Some money goals are very specific, such as “take a trip” or “pay cash for the next major holiday.” Or they can be general: contributing more to charity, say, or simply having a bigger cash reserve because it makes you feel secure.

Even a general goal needs some parameters, though. Do you want to contribute 10% of available funds to charity, or more, or less? How big does a cash reserve need to be to make you feel comfortable?

Some professional advice can help. Even one appointment with a reputable money expert, such as a Certified Financial Planner professional, should give you a clearer idea of how much you need to save and how much you can afford to spend on the things you want.

Or set an amount you want to save—“I will set aside $25 a week for the rest of the year”—and think of it as a bill that must be paid, just like utilities or property taxes. Then automate a weekly or monthly withdrawal from checking into savings.

As they say, the best time to start saving money was 20 years ago. The second-best time is today.

7. Protect your finances

People of all ages are affected by phone scams, identity theft, scam texts and other rip-offs. However, older adults are prime targets for these criminals.

It’s crucial that you protect financial accounts, credit and personal information. Because scammers are so good at what they do, all adults can benefit from a tech-based protection service such as Carefull. Careful provides 24/7 account, credit and identity monitoring and alerts you when it spots unusual activity, signs of fraud and even money mistakes. Plus, it includes up to $1 million in identity theft insurance.

Being alerted to unusual activity regarding your identity or financial accounts means that immediate action can be taken to prevent any further loss.

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