Everything seems unpredictable these days. Take control with these savvy financial decisions. Katiindies / Shutterstock.com
Who knows what 2023 will bring? Good or bad, it is sure to be unpredictable. Plenty of things will be out of your control in this new year, of course. But you can control your money — how you spend, save and invest. Check out these ways to bolster your budget, build an emergency fund, manage spending and saving and more.
It doesn’t take much to stir hope.
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What do you think when you read this tweet?
“We’ve got more work to do, but this year, we signed historic legislation to lower costs for working families and seniors, help keep our communities safe from gun violence, and create good-paying jobs across the country. I look forward to more progress in the new year.”
The tweet was posted by President Joe Biden on New Year’s Eve, and it appears that the portion that caught the attention of many was that last sentence: “I look forward to more progress in the new year.”
Here, we take a look at how a simple sentence took on a life of its own.
Rumors are funny. Once a rumor has been repeated, others join in, sure they’re right. That’s what happened on New Year’s Eve. Someone posted online that Biden’s message was meant to signal another round of stimulus checks.
Within days, numerous websites reported on the tweet, offering hope that everyday Americans are in for another deposit into their bank accounts.
A Newsweek survey found that 63% of respondents support the idea of stimulus checks to help fight inflation. Of those respondents, 42% said they “strongly agree.”
While inflation is cooling, monthly household budgets have suffered through months of rising prices thanks to the global pandemic.
Another round of federal stimulus checks could cause more inflation, according to some economists, but still, hope lingers for households struggling to pay bills.
Chances are, the president’s tweet was precisely what it appeared to be: A U.S. president highlighting legislative accomplishments of 2022 and wishing for more in 2023. Biden, of all people, understands what an uphill battle he has on his hands, thanks to a newly elected Republican-controlled House of Representatives. The odds of House Republicans backing any fresh stimulus checks are slim to none.
It’s possible that one of the things Biden would like to accomplish in 2023 is the return of an expanded Child Tax Credit. Expanding the credit and sending monthly payments to households with children in 2021 helped pull millions of children out of poverty. Biden has made no secret of his support for working families.
When the expanded Child Tax Credit was first introduced, Biden hoped it would continue at least through 2025. Instead, Republicans in Congress put the nix on it after six months, and the Child Tax Credit reverted back to its old form.
If stimulus of any kind is up for debate, it’s likely to be in the form of the Child Tax Credit, particularly because there are some Republicans who also support aid to families with children.
There’s an Italian proverb that says, “Hope is the last thing ever lost.” Perhaps the rumor mill regarding a single tweet churned so quickly because people hoped the government would find a way to ease their financial burdens.
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Here are the stories that shaped your financial world last year. Aaron Freeman / Money Talks News
It’s been a wild year. Crypto has fallen 70%. The stock market has been horrible. Bonds have had the worst year since the 1700s! And we’ve watched inflation hit levels not seen since Reagan was in the White House. What does this mean as we move into a new year? Today, we’re going to take a look at some of the biggest money stories of 2022 — and how they might impact your pocketbook as we move into…
Planning to leave the workforce early? These sources of income can get you through the initial years of life without a steady paycheck. fizkes / Shutterstock.com
Is this the year you will begin an early retirement? Congratulations. After decades of facing the grind every day, you now are free to pursue your dreams. But before you walk away from that paycheck, make sure you have a plan to finance the early years of retirement. If you are too young to tap retirement accounts or to qualify for Social Security, you will need to find alternative sources of…
If you want to save more in 2023, committing to a savings challenge may help.
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Is one of your New Year’s goals boosting your savings account balance? Having extra money in the bank can make it easier to deal with unexpected costs and make those situations less stressful. Are you hoping to save $5,000 in 2023 to boost your emergency fund? This savings challenge may help you stay on track with your personal finance goals.
The first step to working toward a savings goal is to decide how much you want to save. $5,000 is a fantastic goal. For some people, a challenge may help them stay on track. By following a savings challenge, you can have fun and remain committed to your money goals. To reach your $5,000 goal, here are the amounts to save over the 52 weeks that make up a year:
What is nice about this challenge is that the weekly amounts are manageable, and you’ll never have to set aside more than $150 weekly. Additionally, the savings contributions get smaller as you near the end of the year. This can be a massive win for your wallet if you plan to spend extra money on gifts and other holiday purchases during the last few weeks of the year.
If the above savings challenge doesn’t appeal to you, that’s okay. You can create a savings plan that fits your lifestyle and goals. There are many paths available to make your goal a reality.
Here are a few more ways to save $5,000 by the end of 2023:
Save $96.16 every weekSave $192.31 every two weeksSave $416.67 every monthSave $1,250 every quarterSave $2,500 every six months
You can reach your savings goals if you remain committed. If you plan to save money throughout the year, be sure to store your extra funds in a savings account so you don’t miss out on the opportunity to earn interest. If you only have a checking account, take a look at our list of best high-yield savings accounts to learn more.
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The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.
Do you have enough money saved for a recession?
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When it comes to financial planning, preparing for a recession is an important step. An economic downturn can put strain on your finances and throw your budget out of balance. With the right strategies in place, you can make sure you have enough money in your bank account to weather any storm.
The amount of money you should have saved in your bank account during a recession depends on several factors, such as how long the recession may last, how much income you currently have, and what kind of expenses you may face during this time. Whether we are in a recession or not, getting your emergency fund in place should always be your top priority.
Generally speaking, most experts recommend having at least three to six months’ worth of living expenses saved up and easily accessible in case of emergency. This ensures that if there is a sudden loss of income, you will have enough cash on hand to cover your basic needs until you can find a job. This money should only be used for true emergencies. You know it is an emergency if the only other alternative is to either go into debt or tap into your long-term savings.
Having more saved beyond the three to six months’ worth of living expenses is also a good idea, especially during recessions. It can provide an additional cushion during this time. Try aiming for between nine and 12 months of living expenses, if possible. However, saving even just one extra month’s worth of funds may make a big difference should any unexpected costs arise.
It also depends on what stage of your life you are in. If you are a retiree, you may need one to three years of expenses in cash. If you are an entrepreneur, having one year of expenses can help until your business gets back on track. Single folks should put aside at least six months and dual-income families may get by with three months of expenses saved. There is no hard and fast rule, however — you will want to look at your particular situation.
It is important to remember that having a large sum in your bank account does not necessarily guarantee financial security. You should also take into account other aspects of your budget such as emergency funds, investment accounts, and debt levels. Taking steps to reduce or eliminate debts before a recession can help alleviate some of the financial strain and make it easier to manage your money during a downturn.
One of the biggest things you can do to prepare is to invest in yourself. Finding ways to increase or supplement your income can help to create a more secure financial future, no matter what economic situation you may find yourself in. During the 2008 financial crisis, Warren Buffett stated that, “the best thing to do is invest in yourself” by sharpening your skills and focus on being at the top of your field. Buffett has long been a proponent of increasing your human capital. Your human capital consists of things like your education, professional expertise, financial knowledge, and your health.
By assessing your current budget and preparing appropriately, you can ensure that you have the right amount of money saved in your bank account to weather a recession. Establishing an emergency fund and taking steps to reduce debt can also provide peace of mind during this challenging time. With careful planning and proper budgeting techniques, you can navigate any economic hardship that comes your way.
Many people are missing out on guaranteed returns as their money languishes in a big bank savings account earning next to no interest. Our picks of the best online savings accounts can earn you more than 13x the national average savings account rate. Click here to uncover the best-in-class picks that landed a spot on our shortlist of the best savings accounts for 2023.
We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.
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