It’s that time when we promise to go to the gym more or to accomplish a number of other worthy goals. But this year, why not also consider some financial goals?
- Don’t let inflation derail your investment strategy.
Inflation was the big financial story of 2022, hitting a 40-year high. While inflation might moderate somewhat this year, it’s likely to be higher than what we experienced over the past decade. But try not to let today’s inflation harm your investment strategy for the future. More than half of American workers reduced their contributions to their retirement plans or stopped contributing completely during the third quarter of 2022, according to Allianz Life Insurance of North America. Focusing on your cash flow needs today certainly is understandable, but there are other ways you can free up some money, such as lowering your spending, so you can continue contributing to your retirement accounts. It’s worth the effort because you could spend two or three decades as a retiree.
- Control your debts. Inflation also can be a factor in debt management.
Your credit-card debt could increase due to rising prices and variable credit-card interest-rate hikes. By paying your bill each month, you can avoid the effects of rising interest rates. If you do carry a balance, you might consider transferring it to a lower-rate card. And if you’re carrying multiple balances, you might benefit from a fixed-rate debt-consolidation loan.
- Review your investment portfolio.
At least once a year, review your portfolio to determine whether it’s still appropriate for your situation. But be careful not to make changes just because you think your recent performance isn’t what it should’ve been. When the financial markets are down, even quality investments, such as stocks of companies with solid business fundamentals and strong prospects, can see declines in value. However, if these investments still are suitable for your portfolio, you might want to keep them.
- Prepare for the unexpected.
How would you pay for an unexpected expense, such as a major home repair? To prevent dipping into your investments, build an emergency fund of three to six months of living expenses — or a year’s worth, if you’re retired — and keep the money in a low-risk, liquid account.
These resolutions can be useful, so try to put them to work in 2023.
This article was written by Edward Jones for use by your local Edward Jones financial adviser. Edward Jones, member SIPC
– Roberto De Jesus and Amanda Yingling are financial advisers for the Edward Jones branch on Cedarcrest Road in Acworth.