The end of the year is the busiest season for many – but that doesn’t mean your finances can take a back seat to your busy schedule. Between your holiday celebrations and libations, it’s important to make time to review your budget.
We’ve rounded up our top tips for your budget to help you round the year on a positive note – while also keeping your Christmas shopping costs to a minimum.
6 Year-end Budgeting Tips to Make the Most of Your Money in 2023
Ready to get your budget in tip-top shape for 2023? Here are six tips to help you get started – let’s dive in.
1. Set money limits for your gifts
Gifting season can be stressful and expensive – the average American spends nearly $1,000 on gifts per year. And while a larger circle of family and friends is a blessing, gift exchanges can add up quickly.
A great way to plan out your holiday spending and avoid piling up credit debt ahead of the new year is to set gifting money limits. For example, if your close friend and you know you’d like to give each other gifts, talk ahead of time about how much you’re each willing to spend – then you can account for that amount in your budget. You can set limits with friends, coworkers, even your significant other.
Another bonus of a gifting limit? It helps you to avoid gifting inequity – nobody wants to feel like they have to “keep up” with everyone else’s spending to save face. With a gifting limit, you’re more likely to give gifts of similar value.
2. Review your spending and make budget adjustments as needed
This is a great time to check in on your budget and see how well it served you in 2022. Did you go over in certain areas and under in others? With inflation driving up prices, you may have ended up spending more on groceries or household supplies than you originally planned.
Take a look at your budget results from the past three to six months. If your actual spending didn’t line up with your budget goals, grab a calculator and start rearranging the numbers.
Another tip? Try to find a way to increase the amount you stick in savings, retirement or investing in 2023!
3. Get your charitable donations in before December 31
Do you have a knack for charitable giving? If so, you may qualify for a tax deduction.
Charitable contributions are tax-deductible anywhere from 20-60% of your adjusted gross income (AGI). Just make sure the organization is a qualified charity, you’re itemizing your contributions, and you have proof (a receipt or letter from the charity) of your donation.
To ensure your donations are counted toward the 2022 tax year, they will need to be distributed by December 7, 2022.
4. Update your estate plan
If there have been any major changes to your family or job in the past year, it’s a good idea to review your estate plan. Were there new additions/losses to your family? Did your assets significantly change?
Estate planning can be a finicky business, so if you do have changes to make, it’s best to consult with your financial planner or estate attorney to ensure everything is up to snuff legally.
5. Identify areas to cut costs
While you’ve got that budget on hand, you can also make a list of all your subscriptions and accounts billed monthly. Are you actually using Netflix, Hulu, Peacock and Prime TV? Is that Gym membership sitting untouched? Cancel any costs that aren’t serving your lifestyle – you can always re-sign up if you change your mind down the road!
For the subscriptions and accounts you do need to keep, check their website or reach out to a representative to see if they’re offering any New Year’s deals you qualify for – many businesses offer discounts around the holidays to entice new customers, and may extend those deals to existing customers as well.
6. Set goals for 2023
Did you know that those who write down their goals are 42% more likely to reach them?
While a monthly budget is a great way to keep track of your finances, having big picture goals will help you stay motivated to stick to that budget.
Grab a pen and paper or open that Notes app and jot down a few goals you have for the coming year. Maybe you want to reduce your debt by a certain amount, or pay off your car loan. It could be as simple as paying every single bill on time in 2023. Whatever goals you choose, they should be a little challenging – the hurdles will help you grow!
Also think about your financial goals for the next few years, like purchasing a home or investing in art. What steps can you take in 2023 to move closer toward those goals?
These six tips can help you review your 2022 finances and start 2023 off on the right financial foot.
Learn More with Lasso
Lasso is here to help you reach your goals in the new year. Click here to download the Lasso app and connect with a financial advisor today.