February 7, 2025

Asset Control and Quality

Investment for the Future

It’s time to go back to the financial basics in 2023

It’s time to go back to the financial basics in 2023

Between inflation, rocky equity markets, and a crypto roller coaster, 2022 was a weird year.

Despite a strong job market, uncertainty abounded—and many people have been left worrying about layoffs, a possible recession, or how they’re going to afford their next trip to the grocery store. After 2021’s epic gains, it feels like whiplash.

If you’re in recovery mode, financial advisers say the best thing to do in 2023 is to forget about the next best thing—go back to the basics.

“The new year is almost certain to bring economic twists and turns. My advice—while it may sound boring to some—is to keep your finances simple,” Carrie Schwab-Pomerantz, president and board chair of the Charles Schwab Foundation, tells Fortune. “Stick with time-tested fundamentals like budgeting and saving, investing for the long term, and diversifying your portfolio.”

Schwab-Pomerantz believes tried-and-true money management principles will win out in 2023, as people focus on building wealth and a financial security blanket against future volatility. The best thing you can do is focus on the fundamentals, especially if recession fears are getting to you. Nothing helps you get through a job loss or reduction in hours like a sizable emergency fund.

If keeping it simple sounds like an appealing New Year’s resolution, here’s what to focus on.

After a turbulent year, you’ll want to know where you stand. Start 2023 on the right foot by conducting a financial audit to see where your money is going. This means examining your bank account and credit card statements, and categorizing and evaluating your spending.

“Most things are going to cost more next year,” says Brad Hindman, financial adviser with Wells Fargo Advisors. “And items that are financed with variable rates will result in consumers paying more for the same item in the long run.”

You might be surprised by your own spending, says Hindman, noting one of his clients was able to eliminate subscriptions and other expenses that were being automatically debited from his account, while another was able to reduce her entertainment budget.

It’s helpful to write down what you are spending, or use an app like You Need a Budget or Copilot to categorize everything. It is likely you will find some kind of spending that isn’t serving you, whether that’s impulse purchases after a stressful day or food from the fancy grocery store.

Additionally, pull how much you have in retirement accounts and how much debt you have. Determine your net worth. All of this information is good to have, and can inform the financial decisions you make going forward.

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