Your 2023 Financial Planning Checklist
AI's response in regular print | Beverly Hills, CFP®, Joe O'Boyle's in italics
“Your 2023 Financial Planning checklist.”
Financial planning is an important process that can help you achieve your financial goals and ensure that you are prepared for the future. Here are some steps you can take to create a financial planning checklist for 2023:
Set financial goals: Identify what you want to achieve financially in 2023 and beyond, such as investing for your retirement, saving for a child’s college education, saving for a down payment on a home, paying off debt, or building an emergency fund. Have a vision and create a written financial plan towards achieving your objectives.
Create a budget: Determine how much money you have coming in and going out each month. This will help you track your spending and identify areas where you can cut back or save more. Take the time to differentiate between your needs and wants.
In my 20 years of financial planning experience, I’ve found that most folks can’t answer these 3 simple questions:
—Exactly how much am I taking home every month?
—How much am I spending each month? (pro tip: use your last 3 month spending average and then compare that against your last 12 month average monthly spending figure)
—How much am I intentionally saving and investing each month towards my goals?Create an emergency fund: Set aside money in a savings account that you can use in the event of an unexpected expense, such as a car repair or medical bill. Aim to save enough to cover three to six months of living expenses.
Depending on their situation, many of our clients actually aim to save up 12 to 24 months worth of emergency reserves. They set up an automatic monthly savings plan towards building up their emergency fund as a top financial planning priority. During sharp market declines, we have found that investors are more likely to stick with their financial plan and avoid panic-selling their investments when they have met their emergency savings goal.Evaluate your debt: If you have high-interest debt, such as credit card balances, consider creating a plan to pay it off as quickly as possible. This may involve consolidating your debt, negotiating lower interest rates, or transferring your balances to a lower-interest credit card.
Paying off toxic high interest credit card debt is a crucial step towards a successful financial plan. Depending on your situation, you may actually wish to avoid debt consolidation and balance transfers and instead put together a disciplined and aggressive plan of attack to pay off your high-interest debt as quickly as humanly possible.Review your retirement savings: If you are not on track to meet your retirement savings goals, consider increasing your contributions to your 401(k), IRA and HSA:
—You may contribute up to $22,500 to your pre-tax 401(k) or 403(b) plan via payroll deductions in 2023. If offered by your employer, many investors may instead benefit from contributing to an after-tax Roth 401(k) or Roth 403(b) plan to allow for the potential for tax-free growth for retirement. Note: For investors who are age 50 or older in 2023, you may contribute up to $30,000 to your 401(k) or 403(b) plan by taking advantage of the $7,500 catch-up contribution.
—You may contribute up to $6,500 to your tax-advantaged Traditional IRA or Roth IRA for the 2023 tax year. Note: you may contribute up to $7,500 to your tax-advantaged Traditional IRA or Roth IRA if you are age 50 or older in 2023.
—You may contribute up $3,850 for individual coverage and $7,750 for family coverage to your tax-advantaged Health Savings Account (HSA) for the 2023 tax year. You may contribute up to an additional $1,000 if you are age 55 or older in 2023.Review your insurance coverage: Make sure that you have the appropriate amount of insurance coverage for your needs. This may include health insurance, life insurance, disability insurance, car insurance, and homeowners or renters insurance.
Make a plan for your investments: If you have investments, review your portfolio to ensure that it is well-diversified and aligned with your risk tolerance and long-term goals. You may also want to consider working with a financial advisor to help you make investment decisions as part of a holistic financial planning and investing strategy towards achieving your specific objectives.
By following these steps, you can create a solid foundation for your financial planning in 2023 and beyond.
What did you think? How did AI do?
About OpenAI’s ChatGPT tool:
GPT (short for "Generative Pre-training Transformer") is a type of language model developed by OpenAI that is trained to generate human-like text. ChatGPT is specifically designed for generating text in a conversational style. It is a machine learning model and has been trained on large datasets of real-world conversations in order to learn the patterns and styles of human communication.
Joe O'Boyle is the founder and principal of O'Boyle Wealth Management, a full service financial planning and investment management firm, located in Beverly Hills, California. Joe O’Boyle was named to InvestmentNews 40 under 40 class of 2016, and has a catalog of financial planning and investing articles on Money.com & U.S. News. Disclosure information.