Top Twenty Personal Finance Tips for the New Year.
(1) Max Out Your IRA:
You can contribute more to your IRA this year ($6,500). If you don’t have a brokerage account, learn how to open one here.
(2) Contribute to Your 401K:
You can contribute $2,000 more to your 401K this year: in 2023, the maximum contribution amount is now $22,500 -- an increase from $20,500 for 2022.
(3) Max Out Your HSA Account:
That’s $3,850 you can contribute to a triple-tax advantaged account!
(4) Pay Down that Credit Card Debt:
As the Federal Reserve increases interest rates to combat inflation, your credit card interest rates will go up too. A 25 or 50 basis points rate hike likely will result in a similar increase in increase in your credit card interest rate. This means that if your interest rate is 16.00%, it may increase to 16.25% or 16.50%.
(5) Pay Down Other Debts:
Auto Loans, Mortgages, etc. Focus on paying off your debts first.
(6) Live by the 50/30/20 Rule:
A well-established and commonly recommended personal finance rule is the 50/30/20 rule. Divide your income into three categories: spending 50% on needs, 30% on wants, and 20% on savings.
(7) Lose the Subscription Services:
Look through your bank account to see what services you’re paying for. Oftentimes, we forget about some of those $5/month subscriptions that we have. Or, what about those sneaky price increases we forget about? If you’re not using it (or don’t need it), lose it.
(8) Read More Books:
There are many books on finance, wealth, etc. that will help you in 2023.
Check out some good books here:
(9) Get familiar With Some Important Free Financial Resources:
Get familiar with Investopedia, CNBC, Yahoo Finance.
(10) Take Free Online Courses:
Resources such as Coursera and Udemy provide free classes in a wide-variety of fields. Check out open courseware from Harvard, Yale, Columbia as well.
Some other high-quality FREE resources include:
Khan Academy: (learn all kinds of different subjects)
Alison: Learn from some of the world’s best top publishers
Memrise: Learn with digital flashcards
Zenhabits: Productivity advice based on minimalism and psychology
Anki: Flashcard software
CodeAcademy: Learn HTML, CSS, Python, Javascript and more
FreeCodeCampe: Learn to code and collaborate with other coders
Lrn: A phone app with interactive coding mini-quizzes
Babbel: Learn languages
DuoLingo: A lesson-plan based resource to learn languages.
Drops: For just five minutes a day, study a language on your phome
Now I Know: Cool facts via an email newsletter
Chess.com: Play and learn chess with many others around the world for free.
Yousician: Learn guitar, bass, piano, and other instrument songs.
11) Get Familiar With Other Ways to Make Money:
Get familiar with sites like Fiverr and Upwork.
12) Look Into Further Schooling
Look into getting your MBA or other graduate-level degree to propel your career. If you’re intrigued by real estate, here are some good programs for a Masters in Real Estate Finance.
13) Join Linkedin and Reddit Groups:
Make a linkedin account in 2023 and join finance linked-in groups. Also, join Reddit and Discord groups for the stock-market and investing.
14) Budgeting and Expenses:
Create a budget and track your weekly expenses for one month. Break-down your expenses into the following categories: Rent/Utilities/Insurance/Food/Clothes/Fun & Social/ Shopping/ Other; and then figure out where are you spending most of your expenses on. If your rent is more than 30% of your total monthly expense, that’s usually not sustainable.
There are some good budgeting apps out there too.
15) Create an Individual Brokerage Account:
Click here to learn what you should do with your first $1,000.
16) Learn from the Best Investor of All Time:
Learn from Warren Buffett. All his shareholder letters can be found here online. If you want some quick summary of them all, click here.
17) Youtube This
Go to the following Youtube channels that will surely make you much smarter and savvy financially:
MIT Open Courseware, freeCodeCamp, Naval, CrashCourse, Kurzgesagt, Ali Abdaal, Charisma on Demand.
18) Understand the Economy:
Just read this, and watch this video by Ray Dalio, and thank us later.
19) Create Your Emergency Fund:
Usually, the rule of thumb is 3-6 months of expenses in a savings account. However, with the global economy heading into a recession, we recommend 9-12 months in case you lose your job.
20) Get Better at Taxes
There are many different tax advantages and benefits you may not know about. Click here to get more information on tax credits and benefits you may be missing out on.