New Year is traditionally a time for personal reflection and for making resolutions and commitments for the coming months and year. As such, it’s the perfect time to look ahead and make some resolutions that will get your finances on track for the year ahead. For US expats in particular, financial planning can be more complex due to currency and cross-border considerations. So why not start the year as you mean to go on, and use our list of New Year financial resolutions as your guide as you map the months ahead?
Consider the following steps:
1. Define your financial goals for 2023. In what ways would you like your financial situation to improve by the end of the year? Paying off debts perhaps, or starting an education saving plan or increasing your retirement contributions or investments. Write them down and put them somewhere safe so you can revert to them during the year.
2. Schedule a consultation with your financial and tax advisors. Arrange a time to meet with your financial advisor and accountant early in the year to review your goals for the year and see how they can amend your financial plans or otherwise assist you in achieving them. Prior to your meeting, discuss them with your spouse or other trusted friends or relatives to get some feedback.
3. Get organized. Gather all your important financial documents early in the year. As an expat, it’s worth gathering everything you need for your tax filing early, including income, bank and investment statements from 2022.
4. Ensure your insurance and estate planning are up to date. Ensure that your insurance and estate planning are up to date by checking your life insurance policies, homeowners insurance, your wills, trusts, and other pertinent financial records. Review your life insurance policies to ensure that your beneficiary designations are appropriate to your current situation, and that all other insurance arrangements are up-to-date. Also, consider repaying any loans you may have against your insurance policies. Organize them so you can access them quickly and easily, and set up reminders for any renewal dates.
5. Keep debt in check. Pay off high interest debt first, especially if the interest isn’t tax deductible. Do your best to avoid the minimum payment trap. By making only the minimum monthly payment, the interest that accumulates over time can make even “bargain” purchases costly in the long run.
6. Establish an emergency fund. You never know what the future will bring, and it always makes sense to have an emergency fund of 3-6 months income. If you don’t have one already, make 2023 the year when you aim to start establishing one.
7. Plan for the long term. If your children plan to attend college and will require financial aid, start saving for it. If it’s close, think about applying for scholarships. The earlier your children apply, the better your chances may be. Think about retirement too, whether it’s just around the corner or decades away, the earlier you start the better, after all.
The New Year offers us a fresh beginning. This year, resolve to make your finances a priority. With good planning and appropriate guidance, you can begin to work toward financial independence as well as prepare for life’s uncertainties.
If you have any questions, don't hesitate to contact us.
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