Personal Finance Tasks to Be Done ASAP at the Beginning of the Year

At the beginning of each year, we would like to remind readers of some important financial cleaning tasks. even if it’s yours new year resolutions nothing to do with personal finance, these are important things to consider in January.

Here are a few special notes for this year to help you plan:

1. Right now, the future federal student loan payments is uncertain. Aspect CNN He noted yesterday that the Supreme Court has yet to rule on President Biden’s student loan forgiveness program, and unfortunately that may not happen until this summer. For now, the pandemic pause in payments continues.

2. Earlier this week, Bank interest rate 2023 shared by a few experts mortgage rate estimatesincluded the following: “Mortgage rates will rise and fall depending on what the latest economic statement or the Federal Reserve has to say” and “[M]mortgage rates will likely stabilize below 6 percent through 2023.” Expert tips (1) this isn’t an ideal time to refinance, (2) because rental rates are high, it’s a good time to buy if you can afford it, and (3) A wise move right now for first time buyers of an adjustable rate mortgage (ARM) YMMV of course!

3. Related housing prices, GoBanking Rates “If you’ve been waiting for prices to drop to buy a house, 2023 may be your year,” he shared yesterday, adding that economic uncertainty, coupled with rising unemployment, could result in the “biggest post-World War II housing correction.” II period”(!). Here is the frightening figure: Housing prices last October 38% higher more than at the start of the pandemic.

Current rate for 4. Soap opera i savings bonds is is 6.89% (For I bonds issued until April 30, 2023). In case you didn’t know, these bonds earn interest monthly and interest is compounded semi-annually; you earn both a fixed interest rate and a rate that changes with inflation. You can redeem your I bond after 12 months (or keep it there for up to 30 years). If you cash the bond in less than 5 years, you will lose the last 3 months of interest.

5. The best CD rates currently about 4-5%, because Investopedia shared today (Here is some detailed information from.) related savings accountsYesterday, CNBC announced something important about 2023: “Don’t assume the interest in your savings account will keep up with Federal Reserve rate hikes.”

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Personal Finance Tasks to Do ASAP in the New Year

Review 401(k) Limits: The 2023 limit for 401(k), 403(b), most 457 plans, and the federal government’s Conservative Savings Plan is $22,500 – more than $20,500 in 2022 (for more information, see the 2023 limit). Kiplinger). If you are making regular contributions (such as direct withdrawals from your paycheck), be sure to adjust them accordingly if you want to maximize your 401(k). It’s best to do this at the beginning of the year, so you only have to do it once — if you do it in the middle of the year, you either won’t be able to max it out or you’ll have to change your contribution again next January. .

{related: where to save (if you don’t know what you’re saving for)}

Review IRA Limits: Until last year, IRA limits have remained the same since 2019, while inflation has increased for 2023. Kiplinger has been registered. The new limit for annual contributions is $6,000 to $6,500 and $7,500 for people 50 and older.

Reassess your debt: If your mortgage or (private) student loan payments have changed recently, find out how to round the required amount to an even number and make the change accordingly (paying the extra principal). Do your best – every bit helps the principal (This calculator from Bankrate It helps you see how much you have) and knowing that a catchy round number has come out of your bank account helps you know if you have enough balance.

{related: how to decide when to pay off debt and when to save}

For example, if your mortgage payment is now $3,218, you can pay.

• an additional $282 for principal each month (total = $3,500 each month)
• an additional $82 for principal each month (total = $3,300 each month)
• an additional $782 for principal each month (total = $4,000 each month)
• or an additional $32 in principal per month (total = $3,250 per month)

If you have a 529 plan (or several), reevaluate your automatic contributions. Each state changes the amount you can file to receive state income tax deductions from time to time; If you want to maximize, evaluate.

{related: about using 529s to get back to school 411}

{related: Not sure what to do first/next on your personal finance journey? here is our money roadmap}

Reevaluate your subscriptions and other recurring payments to make sure you don’t pay for services you don’t use. (Related: This year, Netflix will begin restricting password sharing. CNET reported recently.)

Automate what you can do: Consider tuning automatic investmentor automatic savings to amortize large expenses. Kat has a small amount of money automatically transferred from the check to online savings accounts to help her. save for multiple financial goalssuch as emergency fund, vacation fund, and predictable large bills (term insurance, accounting advice, etc.).

Readers, what personal finance tasks would you do ASAP in a new year? What have you already done this year; What has this list inspired you to do?

{related: What was the best financial decision you made last year?? (2018 discussion)}

stock photo via 123rf.com/serezniy.