8 Ways to Improve Your Finances in 2023
💸At the start of a new year, it’s tempting to dive into making a list of resolutions – only to quickly get overwhelmed. Today, I’d like to talk you through some things you can do to boost your financial health in 2023, while keeping your head cool and not falling prey to exhaustion.
***
You can listen (24 min) and subscribe here:
***
1. don’t rush into 2023
While we might have super exciting things planned for this year, is there really a need for a rush? It’s better to take a few days now to first reflect and then plan before going head down and rushing into making decisions.
How to reflect on the past year?
Past year: achievements, what are you proud of, what didn’t work out - I usually take my calendar and look week after week what happened.
Future year: what do you want to do more of, who to work with, where to spend your time and with who?
The way you approach your life: Values and intentions.
Investor Ray Dalio is amazing at talking about this so I invite you to follow him on Instagram and also read his book, Principle.
2. START WITH YOUR GOALS
Who do you want to be? What do you want to be known for? What happens at the end of the journey?
A Harvard Business study revealed amazing statistics relating to goal setting and success. The study went on to find that the 14% who have goals are 10 times more successful than those without goals. The 3% with written goals are 3 times more successful than the 14% with unwritten goals.
Once we have the goals, we need to address how to close the gap between intention and implementation. It may be surprising but research shows it’s better to avoid telling people your goals.
When we publicize our goal intentions, and people around you acknowledge how great these are, we get our dopamine reward and it tricks our brain into thinking we’ve achieved them! The more you share (hello social media), the more dopamine we get and the less we achieve.
This is different from having one or several accountability partners who are committed and will help you over the longer term.
Moral of the story: write your goals, review them regularly and stay focused!
3. SIMPLIFY YOUR FINANCES
Automate your bills, savings and investments and cancel your unused subscriptions.
If you’re repaying debt, check out the avalanche method.
Allocate your income into 3 buckets. put in place a budget with the 50/20/30 rule (in this order!):
50% needs: housing, food, transportation, basic utilities, insurances, debt repayment
20% savings: emergency savings, pensions, investments
30% wants: entertainment, travel
Use your money to buy time, rather than material things.
Don’t neglect your pension!
Take steps towards building an emergency fund - this is important if worst case scenario happen, like losing your job or breaking your phone.
4. SPEND SMARTER - AND BETTER
Try to live below your means and spend in line with your values and your budget.
Focus on mindful spending: buy things that make you feel good.
Being more careful doesn’t mean you have to be extremely restrictive - allocate a reasonable allowance for spending on things you enjoy.
Try to build a capsule wardrobe and rent out what you might need for special occasions.
Practice 1 in 1 out: if you want to purchase something, first donate, or sell something you don’t need anymore - this will help you with decluttering. You are responsible for your purchases.
Curb your impulse spending: put an item in your basket and leave it there for 3 days. Oftentimes, we lose interest and forget we ever wanted it.
5. Small steps lead to bigger things
We know small efforts compound over time - so when looking at your big resolutions, break them down and see what small habit you can add to your routine. Habit stacking actually works.
Recognise good and bad habits, as well as the triggers that will put you in certain situations
Learn to say no - in your personal life but also in business. “By saying “no” you’re able to focus on the opportunities that present the biggest upside.
6. START INVESTING
It’s always good to invest in yourself. You can build your skill set and feed your passions with lifelong learning.
Invest your money. Start with a small amount that you’re comfortable with and shop around for investing platforms.
Invest in your well-being and mental health. We are much more productive and successful when we take time to rest and rebuild.
7. change how you talk to yourself
Improve your money language: read finance books, listen to podcasts and become more comfortable around the topic of money.
Build your self-worth by using affirmations and working on your internal money beliefs. Tell yourself you’re good with money, that you can invest, that you can get out of debt, etc.
Learn to calmly observe your emotions about money and don’t judge yourself.
Focus on gratitude and the things that you do have, not what you don’t.
8. enjoy the process
While it’s important to have goals and a destination, remind yourself that money will help you achieve your goals but it’s not a measure of success.
Stop regretting your past decisions. Forgive any mistakes you made - this will help you move on.
A great read to start the year is How Will You Measure Your Life? by Clayton Christenson, where he poses a series of questions: how can I be sure that I’ll find satisfaction in my career? How can I be sure that my personal relationships become enduring sources of happiness? It’s an inspiring book that will help you see the glass half full and get some inspiration and tools to live a better life!
*** AD: Wealthify makes investing simple by managing your investments for you – and they’re offering you the chance get an extra £50 on them! Simply open a Plan at www.wealthify.com/thewallet and invest at least £50, then after 12 months of investing, they’ll pay £50 into your Plan. (T&Cs apply. New customers only. Offer available to the first 500 qualifying customers. Claim the offer and invest by 30th June 2023). With investing your capital is at risk and you could get back less than you put in. Wealthify is authorised and regulated by the Financial Conduct Authority.