Sunday 19th May 2024

New Year resolutions to help tackle debts in 2023

We’re a few weeks into the New Year, and no doubt for some of you, those New year’s resolutions you set in December are a distant memory. New Year’s resolutions are nothing but a wish list without any follow-through or concrete action plan.

For the most part, it’s not the end of the world if you break your New Year’s resolutions. However, some New Year’s resolutions could have dire consequences if broken.

Today’s blog will explore crucial New Year’s resolutions to help you tackle debt in 2023. Be sure to take action with these resolutions today.

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If you keep going as the year proceeds, you’ll be delighted by the progress you’ve made financially by the end of the year.

1 – Perform a 2022 financial audit

How do you know where you’re going if you don’t know where you’ve been? If you want a realistic chance of successfully tackling debt in 2023, you need a good understanding of where all your money went in 2022.

Reviewing a month’s worth of expenses is a mammoth task, so to avoid resistance, start with December and review expenses for at least the last three months.

How much did you earn? How much debt were you able to pay off? What were your fixed and variable expenses? Are you happy with the amount you spent on takeaways? How about the money spent on Ubers? How much of your costs were miscellaneous and unaccounted for?

While this exercise will be time consuming, it’s a crucial step in understanding your current financial position, making it easier to attempt the subsequent resolution.

2- Set clear financial goals

You’ve told yourself, “2023 will be the year I tackle my debts”, but how will you achieve this? Setting clear financial goals is a must.

More importantly, make a plan to achieve these goals; as I’m sure you’ve heard before, a goal without a plan is just a wish!

Once you’re clear on where your money went in 2022, use this information to help forecast and plan for 2023.

Think about this year: what major expenses do you have coming up? Holidays? Christmas? Birthdays? Home renovations? How will you afford them without getting into more debt?

Think about these goals and consider ways to achieve the same results for less money.

For example, you may be planning a big family vacation in 2023. However, if you’re currently paying down debt, now isn’t the time for that trip.

Instead, consider planning for a staycation in a new part of your home country. The most important thing about the holiday is the experience and memories you create with loved ones, so focus more on that and less on the destination.

3 – Prioritise debt repayment

When making financial plans for 2023, prioritise debt overpayment. Often, making minimum debt repayments will cost you more money, thanks to interest. It’s essential to make more than just the minimum repayment if you want to expedite your debt-free date.

Work out exactly who your creditors are and how much you owe each, and prioritise overpayments in order of the highest interest debt first.

Refer to your 2022 financial audit and decide on the sacrifices you will make in 2023 to free up more of your income to pay down debt. Changes like grocery shopping in Aldi instead of Waitrose or takeaways fortnightly instead of weekly will make a difference.

Consciously put that money you would have spent on these things straight towards debt.

Let 2023 be the year of great sacrifices to achieve your bigger goal of debt freedom.

Photo by Josefa nDiaz on Unsplash

Tolu Frimpong

Mouthy Blogger

Tolu is a Money Coach and Content Creator, passionate about helping others break the payday-to-payday cycle and achieve their financial goals, through the power of intentional budgeting, saving and investing. When she’s not talking about money you can find her spending time with her 3 boisterous boys.

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