It may be the start of a new year, but we’re not going to discuss resolutions. Too many bad connotations for great intentions and disappointing results. Or is that just me? Instead, let’s talk about a few financial items to think about as the year commences. Is that similar to resolutions? Yes, but it’s all about branding.

Reduce/Eliminate Credit Card Debt

I’m sure you’re aware of the perils of credit card debt, but it merits repeating. Credit cards are relatively easy to obtain and super easy to use. But they come with a big catch – credit card debt is usually very expensive. It should therefore be avoided whenever possible. Those households with credit card debt have an average balance of roughly $7,500 and pay around $1,380 per year in interest (NerdWallet, Inc.). That’s an average rate of over 18%. 

If you have credit card debt, paying it off should be your first financial resolution. After that, you’ll need to reduce spending and accelerate paying down the balance. Reducing spending is self-explanatory. Accelerating the paydown is tough but not impossible. For example, if you are fortunate enough to get a raise or a bonus, use some of it to reduce your credit card debt. 

Once your credit card debt is gone, tackle any other high-cost debt. For example, if you have any variable rate debt whose interest rate is tied to the Prime Rate, like a home equity line, it has become much more costly since the Fed began hiking rates last year.

Build Up Your Emergency Fund

You’ve all seen the statistics. Americans are woefully unprepared for unexpected expenses. According to a recent survey by Bankrate, 44% of Americans can’t handle a surprise $1,000 expense. This number has improved over the last few years but remains too low. Speaking as someone who had to replace their roof several months ago, a surprise expense can be much worse than $1,000.

Your emergency fund should contain three to six months of living expenses. That should be sufficient to get you through most emergencies. If you’re starting from scratch, that amount can seem like a daunting goal, if not a downright impossible one. Don’t try to do it all at once. The easiest way to build an emergency fund is to set up automatic transfers. Some money goes from your main bank account to a savings account every time you get paid. Whether you allocate a large amount or a small amount, the most important thing is that you start.

Increase Your Retirement Savings

The growing number of Americans with insufficient retirement savings is a huge issue. A 2019 Federal Reserve study found that 60% of Americans either don’t think or don’t know if their retirement savings are on track. If you are in that group, there is one sure way to improve your situation – save. 

Do you have access to a company 401(k) plan? If so, that’s great! Contributions to a 401(k) can be made on a pre-tax basis, so they lower your taxable income. Many companies also offer matching programs, giving contributors an extra bang for their buck. It’s free money. Who doesn’t love free money? If you’re not yet contributing, start. 

If you’re already contributing, consider increasing your contribution amount. For example, if you’re currently setting aside 1 percent of your salary, increase it to 2 percent. If you time this increase with your annual raise, you may not even see a drop in your take-home pay. For the aggressive savers out there, contribution limits are going up in 2023 – those under age 50 can contribute $22,500 to a 401(k), while those over 50 can add an extra $7,500 in catch-up contributions. 

Fund IRA/Roth IRA Accounts

If you don’t have access to a 401(k), you can save for retirement via an Individual Retirement Account (IRA) or a Roth IRA. (You can use these accounts even if you have access to a 401(k) plan.) The contribution limits for these accounts are lower than for a 401(k), but they are still a valuable tool for retirement savings. But, of course, they are only valuable if you use them! You have until April 18th to make 2022 IRA or Roth IRA contributions. If you have a child who worked in 2022, think about helping to fund a Roth for them as well!


There’s no time like the present to improve your financial situation. So, make it a goal to do so in 2023.

David Crossman, CFA, is a Senior Portfolio Manager with Bedel Financial Consulting, Inc., a wealth management firm located in Indianapolis. For more information, visit their website at or email David at

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