2023...New Year, New Plan

2023...New Year, New Plan

January 11, 2023

2023, a fresh start. A blank canvas of days and months stretching ahead with opportunity and intention. There’s something about a new year that encourages introspection and the drafting of resolutions to put oneself on course for betterment. Some years, the focus is on health or diet, or tackling new projects. But every year, you should evaluate your finances and spending to ensure you are on track to meet your goals, both immediate and long-term. It may mean small adjustments to your budget to accommodate a big purchase in 2021 or taking a hard look at your retirement goals and making larger moves. Here are 6 steps you can take to draft a plan for financial success in the new year and beyond.

#1: A Year in Review

Money is a science, and for optimum results, you will want to look at actual activity. January is a great time to gather your financial statements and review your income and spending in the context of the entire year. Are there patterns or spikes in your behavior? Did you meet or exceed your savings goals in 2022? Were there lifestyle updates that might affect insurance policies or tax deductions? You will want to use these evaluations to draft your budget for 2023, especially to accommodate short-term needs and long-term goals.

#2: Draft Your 2023 Budget

If you were meticulous about reviewing your financial statements from the prior year, this part should be fairly easy. And it should not be difficult even if you did not have all of 2022’s information at your fingertips. First, you will want to list out your Fixed Costs, like your mortgage, car payment, utilities, child care, insurance, etc. These will likely make up the bulk of your budget. Then, add a line item for Savings. Whether for a rainy day, a new car, or the trip to Scotland you have always wanted to take, this is an important allocation to help you successfully reach shorter-term goals without affecting necessities. To ensure 2023 is working toward your long-term financial goals, too, add investments to your budget. These could be as simple as 401(k) or Roth IRA contributions, or making more complicated market investments, but responsibly, they should be part of your 2023 financial plan. Lastly, as you evaluated your 2022 spending, you likely noticed a sizeable amount of money spent on extras like coffee, eating out, Netflix subscriptions, and clothing purchases. Your 2023 budget should include a line item for non-essential spending, but the beginning of a year is the right time to review your habits and consider making cuts so more dollars can be directed toward savings and investments.

#3: Look for Ways to Save More

Before you set your 2023 budget in stone, January is a good month to take stock of your fixed costs and see if any of these can be decreased. Do a little market research, then examine your cell phone, credit card, or car insurance plans, and call your providers to see if you can negotiate better options.  Doing a little legwork now can save you hundreds and thousands of dollars over time, which you can put towards your retirement. Your future self will thank you.

#4: Pay Down Credit Card Debt

Another smart way to start a new year off on the right foot is by reducing credit card debt. This frees up dollars for your current and long-term goals that are otherwise being put towards interest. The only entity that benefits from credit card interest is the bank, so take control of your hard-earned dollars in 2023, and let that money support your bottom line.

#5: Know the New Rules to Maximize Your Investments

The 401(k) is a well-known retirement savings tool for those who are employed. When going into a new year, it is important for employees to find out the maximum allowable contribution to their 401(k) plan, and then take advantage of it- especially if the employer will match, because that is basically free money in your pocket. Then update your percentage or dollar-based contributions to automatically fund your 401(k) each pay period. The monies are out of sight, out of mind, and yet they will continue to work towards your future. In 2023, the 401(k)-contribution limit will remain $22,500, so make sure you are hitting that amount. If you are over age 50, you can contribute an additional $7,500 for a total of $30,000. Interesting to note is that within the same year, you can actually contribute to multiple traditional 401(k) and after-tax Roth 401(k) accounts in the same year, but the cumulative contributions to all accounts still cannot exceed the annual 401(k) limit of $22,500 or $30,000 for those over age 50.

#6: Invest More if You Can

If your budget allows, you should consider investing outside of your 401(k) plan. Though tax-advantaged and easy to manage, retirement accounts have limitations and penalties for early withdrawals. Investment accounts complement 401(k) and IRAs but offer more opportunities for savings (no limits!), immediate access to funds when needed, and there are also tax deferral benefits on unrealized profits.

Following a year with so many challenges, 2023 is almost certain to be an improvement. But as we have seen, that cannot be taken for granted. You will want to start the new year with a solid action plan for success, even if it needs to be a bit fluid for the first few months. If you are feeling overwhelmed with putting together your plan or budget, or just want to ensure that you are on the right track to hit your financial goals, we encourage you to reach out. As experienced financial advisors, we can evaluate your unique situation, and provide guidance that will benefit you in this year, and the many years ahead.


Located in Truckee, CA, Pacific Crest Wealth Planning believes retirement & financial planning should be a highly personalized process. Effective planning may enable you to enjoy the freedom of your retirement years. Without it, it may take everything you have just to get by.  As a fiduciary, we are obligated to put our client’s interest before our own.  Please feel free to contact one of our CERTIFIED FINANCIAL PLANNER® practitioners at (530) 563-5250 or by email.

This article is meant to be general in nature and should not be construed as investment or financial advice related to your personal situation.  Please consult your financial advisor prior to making financial decisions.

John C. Manocchio, CFP®, CRPC® (CA Insurance Lic#0H73423) is a Registered Representative and Investment Adviser Representative with/and offers securities and advisory services through Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser. Fixed insurance products and services offered through CES Insurance Agency.