4 Things to Do With Your Money Before 2023

Here are some moves that could help set you up for a financially successful year.

We're still a few months away from the end of 2023, but there's no need to wait until New Year's resolution time to take steps to get your financial life in order. Here are four smart financial moves to start thinking about now, which can set you on the path to better financial health in 2023 and for years to come.

1. Maximize your savings

As you've probably heard in the news, the Federal Reserve has been raising interest rates aggressively to try to get inflation under control. And you may think this should translate to a higher yield on your savings account -- but you might be wrong.

According to the FDIC, the average annual percentage yield, or APY, on a savings account in the United States is just 0.17% as of Sept. 19. Now, this is more than it was a year ago, but not by nearly as much as you might think.

Fortunately, there are some banks that pay much more than the national average, especially those that are based online. As of late September, some of our favorite high-yield savings accounts had APYs of well over 2%. If your savings account is at a branch-based institution, now could be a smart time to make a change.

2. Start an IRA, or add to one

For 2022, Americans can contribute as much as $6,000 ($7,000 if aged 50 or older) to their individual retirement account, or IRA. With the stock market down significantly from its highs, now could be a smart time to invest for your retirement by opening a new IRA account or adding to an existing one if you haven't yet maxed out your contribution.

Alternatively, if you have a 401(k) or similar retirement plan at work, it could be a smart time to consider increasing your contribution rate. Most financial planners (myself included) suggest that Americans should aim to save at least 10% of their income for retirement, so maybe increase your savings rate by a percentage point or two before the end of the year.

3. Do an expense checkup

One smart exercise to do every so often is to print out the last couple months of your bank and credit card statements to do a spending checkup. Look for expenses you could have done without, subscriptions or memberships you aren't using, and other ways that you could save money without adversely affecting your lifestyle. The last time I did this, I realized that I was spending twice as much on dining out as I was comfortable with, and found a $38.99 monthly online news subscription that I hadn't used in months.

4. Make a plan to attack your high-interest debt

Many people aren't aware of this, but your credit card interest rates aren't just high -- they're variable. And they are directly tied to the Federal Reserve's interest rate hikes you've been hearing about. In the current rate-hiking cycle, the Fed has raised benchmark interest rates by 300 basis points (3%), and your credit card interest rates have risen by the same amount. In other words, if your credit card's APR was 16.9% at the start of 2022, it's likely to have moved up to 19.9% now.

The point is that if you have credit card debt, it's even more important now to come up with a plan to get it under control. You might look into a 0% APR balance transfer offer. Another option could be a personal loan with a significantly lower interest rate and a set payoff date. After all, the less interest you're paying, the more of your payments will go to knocking out the principal.

This isn't an exhaustive list

There are plenty of smart money moves you can make that I haven't listed here, and not all of these are going to apply to everyone. But the point is that in the uncertain economic times we're living through, it's a good idea to take a step back and assess how you can maximize your financial well-being, both now and in the future.