7 things you can do now for financial success 2023

If you want more time, freedom, and flexibility in your future, now is the time to focus on your finances. Whether you are just starting out or trying to correct past financial mistakes, now is the time to get your finances in order and work towards building the life you deserve. 

Here are 7 things you can do before 2023 to improve your financial security and increase your chances of success:

1. Set Financial Goals

Setting financial goals is important because it helps you plan and prioritize your financial decisions. Financial goals give you something to work towards and can help you stay motivated to make smart financial choices. They can also help you track your progress and measure your success.

Some examples of financial goals might include saving for a down payment on a house, paying off credit card debt, building an emergency fund, saving for retirement, or paying for your child’s education.

Having specific financial goals can help you create a plan to achieve them, such as by creating a budget, cutting costs, increasing your income, or investing your savings. By setting and working towards financial goals, you can increase your likelihood of financial success and your overall financial well-being in 2023.

2. Calculate your Net Worth

Knowing your net worth is important because it gives you a snapshot of your financial situation and helps you understand your overall financial health. Your net worth is the total value of your assets (such as your savings, investments, and property) minus your liabilities (such as debt).

By knowing your net worth, you can understand your starting point and set realistic financial goals based on your current financial situation. You can also make informed financial decisions and plan for the future, such as by saving for retirement or building an emergency fund.

One easy way to calculate your net worth is to attach all your financial accounts to an aggregator like Personal Capital. This tool saves me hours each month and it’s free! 

3. Review your Budget/Intentional Spending Plan

The start of a new year is a great time to review and assess your budget and financial plans. It can be helpful to look for areas where you can cut back on expenses or reduce costs that have increased over the past few years. 

By updating your budget, you can identify things you can do before 2023 to stretch your money further and achieve your financial goals. You might start by adjusting expenses like phone and internet bills, groceries, or housing costs if they have increased. By taking these small steps, you may be able to create more room in your budget for long-term savings goals, such as vacations or retirement.

4. Check Your Emergency Fund (And Consider Moving it to an HYSA!)

It’s important to have an emergency fund in case something unexpected happens, such as a job loss or unexpected medical bills. You’ll want to save at least 3-6 months’ worth of living expenses in a liquid, easily accessible account.

Right now HYSA (high yield savings account) rates are higher than ever! Many of these accounts are just as liquid as a regular savings account, have no minimums, and are FDIC insured. Find a good one with a great rate and low/no fees and get going. 

5. Make a Plan to Pay Off High-Interest Debt

If you still have credit card debt or other high-interest debt, focus on paying it off as soon as possible. 

You can’t make progress on your net worth through investing until you’ve paid off your high interest debt. 

6. Save on Taxes By Using the Right Retirement Accounts

Retirement accounts are a great way to save for the future and lower your taxes. If your situation has changed this year, you might be ready to contribute to a new type of account. Figuring out the right accounts for you will be

Contributions to a 401(k) or traditional IRA are tax-deductible, which means that you can reduce your taxable income by the amount you contribute. This can lower your tax bill in the current year.

Contributions to a Roth IRA or Roth 401(k) are not tax-deductible, but the money you contribute grows tax-free and can be withdrawn tax-free in retirement. 

If you are enrolled in a high-deductible health plan, you may be eligible to contribute to a Health Savings Account (HSA). Contributions to an HSA are tax-deductible, and the money can be used to pay for qualifying medical expenses tax-free.

7. Review and Understand Your Investment Portfolio

I’m a firm believer that you should never invest in something you don’t understand. If you have investments in a 401(k) or investments managed by you, a partner, or a financial advisor, you should learn what they are and make a plan to review them periodically to make sure that they are aligned with your financial goals and risk tolerance. 

If you have no idea where to start, the best place is to learn the basics of the stock market by reading a book, attending a workshop, or taking a course. To get you started, sign-up for my next free beginner investing workshop on January 19th, 2023, right here

How to set your kids up financially and jump start their financial education.

Investing for your kids while they are young can support your kids in ways you never imagined. You don’t need to invest a ton to make a big impact on your kids future, thanks to our best investing friend, compound interest. 

Not only will it help you build wealth for important expenses they will incur in their young adult life such as education or housing, but it is also an opportunity to show your kids the importance of investing and the value of compound interest.

There are several investment accounts that are good for kids. Here are a few options of investment accounts to consider.

Custodial Accounts

A custodial account is an investment account that is set up and managed by an adult (the custodian) on behalf of a minor (the beneficiary). These accounts may be opened at a brokerage firm, bank, or other financial institution. Custodial accounts can be used to invest in a variety of financial instruments, including stocks, bonds, mutual funds, and ETF’s. A Custodial brokerage account is a great flexible option that has no contribution limit. 

Another option is the Custodial Roth IRA. This is a great option if your child has any earned income even if it’s for a business you run. 

Important to note that your child can’t invest money from chores or an allowance but could invest money from jobs such as babysitting or mowing lawns or any other job they get in their teenage years. Be sure to discuss with your accountant on how to keep accurate records. 

Contribution limits for a custodial Roth IRA are the same as a regular Roth IRA and will be $6,500 for 2023. If you want to learn more about Roth IRA’s in general, be sure to check out this quick video.

A big benefit of these accounts is that there is no impact to FAFSA (Free Application for Federal Student Aid) unless money is withdrawn, then it would affect the following year’s aid. 

Education savings accounts

An education savings account, such as a 529 plan or a Coverdell Education Savings Account (ESA, designed for families in a lower income bracket), is designed specifically to help save for a child’s education. These accounts offer tax advantages and can be used to pay for qualified education expenses, including tuition, fees, and other educational costs.

Qualified 529 plan expenses include:

  • Tuition and fees
  • Books
  • Computers technology, related equipment, and internet access
  • Special needs equipment
  • Room and board if the student is enrolled at least half-time
  • Up to $10,000 in K-12 tuition expenses (per year, per beneficiary)
  • Up to $10,000 in student loan payments (lifetime limit)
  • Costs of apprenticeship programs

Non-qualified 529 plan expenses include:

  • College application and testing fees
  • Transportation costs
  • Health insurance
  • Extracurricular activities
  • Expenses used to generate federal education tax credits such as the American Opportunity Tax Credit (AOTC) or the Lifetime Learning Tax Credit (LLTC)
  • Any expense that is not considered a qualified education expense

Tax free growth happens within the account and withdrawals for qualified education expenses are also tax-free at the federal level.

There are some important things to note. Different states offer different 529 plans. Additionally this account can impact FAFSA by up to 5.64% because assets in the account are counted as the parent’s, not the child’s. 

Uniform Gifts to Minors Act (UGMA) or Uniform Transfers to Minors Act (UTMA) Accounts

These are accounts that allow a minor to own assets, such as stocks, bonds, and mutual funds, in his or her own name. The adult who establishes the account is typically the custodian, and the minor is the beneficiary, so the child will take ownership of the account once they are of age (varies by state).

Some benefits of these accounts include that there are no contribution limits and earnings are taxed at child’s rate. For example, if your child earns $2,000 in their account in 2021: The first $1,110 is exempt. The next $890 would be subject to taxes at the child’s tax rate.

An important flag for these accounts is that UTMA/UGMA can decrease eligibility for FAFSA up to 20%. This is important to consider before investing in an account like this.

It’s important to consider the long-term goals and needs of your children when choosing an investment account, while still finding ways to keep these funds as flexible as possible should you and your child’s goals change.

Your 401(k) is one of the best and most powerful tools at your disposal to help you to prepare for retirement.

The first step is to make sure you are making the most of this account is by understand the basics of how 401k contributions and matching works and ensuring that you are taking your employer match if your employer offers one.

The better option between a traditional 401(k) or a Roth 401(k) will depend on your financial goals and tax preferences.

Let’s clear up the confusion between these two 401(k)’s right here.

Both accounts have the same contribution limit. In 2023, you can invest up to $22,500 per year in your 401(k). The opportunity to invest that much is a huge perk of either type of 401(k), especially when compared to an IRA’s contribution limit of $6,500 per year.

There is one big advantage of the Roth 401(k).

A Roth 401(k) is that it allows you to contribute after-tax dollars to your retirement savings, and to withdraw your contributions and earnings tax-free in retirement.

I personally love the idea of getting taxes out of the way now so I don’t have to deal with them in retirement.

This can be beneficial if you expect your tax rate to be higher in retirement than it is currently, since it allows you to pay taxes on your contributions at your current rate and then withdraw them tax-free in the future.

There are some disadvantages to consider to a Roth 401(k).

Another potential disadvantage of a Roth 401(k) is that it may not be available through all employers. Some employers may only offer a traditional 401(k) plan, and may not offer the option to participate in a Roth 401(k) plan at all.

On the other hand, one potential disadvantage of a Roth 401(k) is that it does not provide an immediate tax benefit. With a traditional 401(k), you can contribute pre-tax dollars and reduce your taxable income in the current year. 

Overall, whether a Roth 401(k) is a better option than a traditional 401(k) will depend on your specific goals, tax situation, and investment horizon. It is important to carefully review the features and benefits of both types of 401(k) plans.

If you’re ready to learn more about how to make the most of your 401(k) plan, check out your free 401(k) checklist and learn how to make the most of this valuable account.

Learn the basic steps to start investing on the Manifest Daily podcast.

In this episode with Manifest Daily, Dheandra and I explored money, investing, and building wealth in the long-term.

We chatted about:

  • The foundational steps to start building wealth
  • Overcoming the anxieties around money
  • Basic steps to start investing
  • Understanding the different types of investment accounts
  • How to budget in a way that is simple and not stressful

Ready to learn more? Don’t miss my next FREE workshop:

(Even if you’re short-on-time and even in this economy.)

Check out Dheandra at the Manifest Daily and be sure to check out more episodes of her amazing podcast!

The BetterWallet podcast is hosted by my amazing and talented friend Marc Russell, and is all about demystifying the topic of money and sharing powerful money stories from all kinds of people who have beat the odds and found success in their own way.

In this episode we talk all about 401(k)’s and specifically how and why it’s important to build wealth beyond just your 401(k) account.


[2:02] Who would play you in a movie?

[3:47] Learning money from divorced parents

[6:57] Tess’s path to Wealth with Tess

[11:28] Investing tax advantages

[22:28] Start investing in 401k

[24:18] Disagreeing with Dave Ramsey

If you’re ready to make the most of your 401(k) check out my free 401k checklist that will walk you through the steps you need to take to stop leaving money on the table and start making more money from your 401(k).