Three Money-Smart Resolutions for 2023

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The tradition of celebrating the New Year first appeared about 4,000 years ago in Babylon, Mesopotamia, which was located along the Euphrates River in what is now Iraq. (The ruins of Babylon are about 55 miles south of Baghdad.)

The Babylonians held their first New Year’s celebration in the month of March to commemorate the start of the spring planting season.

In the modern world, New Year’s Day (Jan. 1) is the most popular day to hit the reset button and make pronouncements of self-improvement. And while you can Google plenty of bah-humbug studies that point out just how few of these resolutions last longer than a few weeks, I would argue that any positive resolution should be celebrated.

Besides, what do we have to lose? Even if you were to make a resolution (say, to exercise more) that lasted only a month, or even three, you’re better off for having tried.

And if it sticks?

This all holds doubly true for finances and saving.

It’s 2023! And here are three approaches to making sticky financial resolutions to help you this year, next year, and beyond.

ONE – Make specific resolutions about money and saving

Holidays. Taxes. Travel. Family.

Oh, and this year I’m going to save more!

Too general.

Part of the reason that so many resolutions fall by the wayside is because they aren’t specific enough to easily track or achieve. Others fail because they require constant vigilance, or even a seismic lifestyle change. Let’s face it; change is hard, especially when it comes to tossing away old habits or starting new ones.

Saving more? That’s a big-picture financial resolution that could take as little as a single minute to achieve. 

If you haven’t reached retirement, and if you have access to a retirement savings plan (as tens of millions of people do), one of the easiest and fastest ways to adhere to a “save more in 2023” resolution is to merely “up” your automatic contributions.

Go to your plan’s website (or to your bank’s) and take a deep breath and increase your automatic savings withdrawals by at least a few percentage points.

Pronouncement: I’m going to save more in 2023.

Click, click. Resolution achieved. (Take that, Google!)  

TWO – Resolve to focus on either investing or paying down debt

Debt is the thief of retirement dreams, and money that is not going out is the same as money coming in.

One of the most common financial resolutions I see (especially after the expenses associated with the holidays are tabulated) is a vow to pay off every cent of debt as quickly as possible.

There are certainly worse goals than that.

But when it comes down to a choice between investing or paying off debt, the best decision will depend on your specific financial situation. For instance, if your debt is comprised of high interest obligations, particularly credit cards, then the focus probably needs to be on debt reduction, because debt is likely eating up more income than your investments are bringing in. (There are exceptions, and so view this is a guideline and not an absolute rule.)

However, if the interest on your debt is low (below 4%), then it’s likely the scales are tipping in favor of you focusing on saving and investing.

Ideally, you work with your advisor to create a comprehensive plan, and you are able to move in two positive directions (less debt, more savings) at once.     

THREE – Make a resolution to communicate with your partner about money 

As children, many became convinced that a monster was lurking underneath the bed.

One of the biggest “boogie men” that adults have revolves around conversations about money. And those fears, grounded in an apprehension about arguing, miscommunicating, or uncovering some dark fiscal secret, are self-fulfilling.

That is, the longer you avoid examining the hard topic of money with your partner, the bigger the problems will be.

Case in point: I’ve met with dozens, even hundreds of people, who have come in for a first-time appointment, only to find that their biggest financial issue was that neither person had a real grasp of how their partner viewed, invested, or handled money. When couples don’t communicate about money, or, worse, when they keep financial secrets from one another, it compounds any issues that exist. (And these can often become big, life altering problems.)

Like almost anything, communication takes practice. And communicating about money takes expertise. If you and your partner have a chasm in your understanding about any aspect that concerns your partner’s approach to money, I urge you to find a way to learn to talk about the topic so that you can get your agendas, goals, and futures aligned.

If communicating about money is the proverbial monster beneath your marital bed, talk to your advisor. He or she will remove the emotion and calmly provide detached answers that could improve your relationship and your financial future.

And if you aren’t currently working with a financial advisor, or you’d like to learn more about how RAA can help you, schedule a complimentary call with one of our airline-specialized advisors at RAA.com/consultation.

SOURCEAero Crew News, January 2023
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Gary Krasnov serves as the Chief Compliance Officer and Vice President of Airline Strategy for RAA. Gary joined RAA in 2016 as part of the Advisor Financial Services merger where he was a Partner and CCO. He is responsible for firm compliance with all SEC and DOL laws and regulations. Gary is also an active Delta pilot who currently flies as an international B-777 captain. Prior to Delta, Gary flew in the U.S. Navy and retired as a commander from the Navy Reserves. He graduated from the University of New Hampshire with a degree in economics and is an Accredited Investment Fiduciary (AIF®).

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