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2023 is right around the corner — here are 6 steps you can take now to feel more financially prepared in the new year

2022 has dealt a blow to many peoples' personal finances; here's how to plan for 2023.

Uwe Krejci | Stone | Getty Images

It's safe to say we can all agree that 2022 has been a stressful year for people's finances: Inflation surged, having a profound impact on the costs of essentials like gas and groceries; interest rates increased with every rate hike set by the Federal Reserve so it became more expensive to take on debt; and, of course, the stock market took many tumbles, which left many investors feeling shaken.

And let's not forget the talk of a potential recession and the mass layoffs that have become more common since the summertime.

While these events are out of our control, there are still steps you can take in 2023 to feel a little more confident and prepared with our finances.

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1. Build your emergency fund

An emergency fund is meant to help you cover unexpected expenses and can really come in handy when life throws you a curve ball. For instance, if you're laid off, your emergency fund can allow you to still pay your bills and pay for food without having to rack up credit card debt to get you by.

If you don't already have an emergency fund, now is the time to start building one. Experts typically recommend saving three to six months' worth of expenses for a fully funded emergency savings account, but even depositing just a $1,000 is a good start.

It's also recommended to use a high-yield savings account over a traditional one since account holders can earn more interest on their balances this way. The UFB Secure Savings account is popular due to it's high interest rates, no monthly maintenance fee and no minimum balance requirement.

UFB Secure Savings

UFB Secure Savings is offered by Axos Bank ® , a Member FDIC.
  • Annual Percentage Yield (APY)

    Up to 5.25% APY on any savings balance; add a UFB Freedom Checking and meet checking account qualifications to get an additional up to 0.20% APY on savings

  • Minimum balance

    $0, no minimum deposit or balance needed for savings

  • Fees

    No monthly maintenance or service fees

  • Overdraft fee

    Overdraft fees may be charged, according to the terms; overdraft protection available

  • ATM access

    Free ATM card with unlimited withdrawals

  • Maximum transactions

    6 per month; terms apply

  • Terms apply.

2. Check your credit score

Checking your credit score can be especially important if you plan on applying for a mortgage, loan, apartment or a new credit card later in the year. Knowing your credit score ahead of time can allow you to have adequate time to rectify any issues that could land you a high interest rate or disqualify you from being approved altogether.

For example, if you check your credit score and it's lower than you'd like, you have several months to lower your credit utilization ratio and continue making on-time payments so you can improve your score and get a better interest rate before you apply for that mortgage or credit card.

Also, consider using a tool like *Experian Boost™, which was designed to help consumers improve their credit scores by including positive payment records for certain utilities, subscription services (i.e. Netflix) and rent on their credit reports. According to Experian, 66% of Experian Boost users saw an increase in their scores, an average of 13 points for FICO® Score 8, the most commonly used score by lenders.

Experian Boost™

On Experian's secure site
  • Cost


  • Average credit score increase

    13 points, though results vary

  • Credit report affected


  • Credit scoring model used

    FICO® Score

Results will vary. See website for details.

How to sign up for Experian Boost:

  1. Connect the bank account(s) you use to pay your bills
  2. Choose and verify the positive payment data you want added to your Experian credit file
  3. Receive an updated FICO® Score

Learn more about eligible payments and how Experian Boost works.

3. Create a plan for paying for large upcoming expenses

If you have a large expense next year that is planned — like a home renovation, college tuition, or new car purchase — it's important to have a plan in place for paying for it. Maybe you're planning to take on a personal loan for your home renovation; in this case, you'll want to make sure your credit score is in a good spot so you can qualify for lower interest rates.

Or perhaps you think it's possible to pay next semester's tuition if you save some money each month — planning ahead will help you figure out exactly how much you need go set aside every month. It's better to go in having a strategy rather than wait for the last minute and make a financial decision that could potentially turn into a costly mistake.

4. Save money for student loan payments

If you're a federal student loan borrower whose loan balance is still up in the air due to setbacks with the Biden Administration's plan to cancel up to $20,000, now's your last chance to prepare for payments. According to the Biden Administration, the payment pause has been extended one final time through June 30, 2023. If student debt cancellation has not been implemented by this time, payments will resume 60 days later in August 2023.

In other words, you could potentially have eight months next year to plan for how you'll start making payments again if your balance won't be wiped out by the Administration's debt relief plan. Of course, many individuals don't want to make any payments right now, despite the pause on interest, because they could save significant cash if their balance ends up being wiped out.

One of the best ways to prepare, though, is to start saving your monthly payments. So if your monthly payments are $300, you should put that $300 in a savings account every single month. This way, you'll still have money set aside to make one large loan payment when the pause is lifted. And if your debt ends up being wiped away, you'll have a lump sum of cash that you can use towards another financial goal of yours, like purchasing a home or investing for retirement.

5. Create a plan for paying down debt

While debt can certainly be a useful tool for helping you afford certain things (like a house or college), it's still important to manage your debt in a healthy way so you aren't over-leveraged. Plus, lowering your debt now can help you have easier access to debt if you really need it at a later time — like in the event of a large surprise expense that your emergency fund can't fully cover.

One way to pay down debt is to use a balance transfer card, which allows you to move debt from a high-interest credit card to a new card that offers no interest for an introductory period. This should help you pay down your balance a little faster since you'll save on interest charges. The Wells Fargo Reflect® Card, for example, has a 0% intro APR for 21 months on qualifying balance transfers and new purchases (after, 18.24%, 24.74%, or 29.99% variable APR. Balance transfers made within 120 days from account opening qualify for the intro rate, BT fee of 5%, min $5.

Wells Fargo Reflect® Card

On Wells Fargo's secure site
  • Rewards


  • Welcome bonus


  • Annual fee


  • Intro APR

    0% intro APR for 21 months from account opening on purchases and qualifying balance transfers.

  • Regular APR

    18.24%, 24.74%, or 29.99% Variable APR on purchases and balance transfers

  • Balance transfer fee

    5%, min: $5

  • Foreign transaction fee


  • Credit needed


See rates and fees. Terms apply.

Another balance transfer card option is the Wells Fargo Active Cash® Card since it offers an introductory 0% intro APR for 15 months from account opening on purchases and qualifying balance transfers. 20.24%, 25.24%, or 29.99% Variable APR thereafter; balance transfers made within 120 days qualify for the intro rate and fee of 3% then a BT fee of up to 5%, min: $5. However, this card also offers a welcome bonus: you can earn $200 cash rewards bonus after spending $500 in purchases in the first three months. Plus, you'll earn unlimited 2% cash rewards on purchases making this a great cash-rewards card to hold long term.

Wells Fargo Active Cash® Card

On Wells Fargo's secure site
  • Rewards

    Unlimited 2% cash rewards on purchases

  • Welcome bonus

    Earn a $200 cash rewards bonus after spending $500 in purchases in the first 3 months

  • Annual fee


  • Intro APR

    0% intro APR for 15 months from account opening on purchases and qualifying balance transfers; balance transfers made within 120 days qualify for the intro rate

  • Regular APR

    20.24%, 25.24%, or 29.99% Variable APR on purchases and balance transfers

  • Balance transfer fee

    3% intro for 120 days from account opening then BT fee of up to 5%, min: $5

  • Foreign transaction fee


  • Credit needed


See rates and fees, terms apply.

Another way to pay down debt a little faster is to use a debt consolidation loan. With these types of personal loans, you apply for an amount that's enough to cover all your debt balances and the lender will send the funds to each of your creditors — you'll then only be responsible for paying back the debt consolidation loan which should have a lower interest rate than your credit card.

SoFi Personal Loans is a promising contender since this lender lets you apply for up to $100,000. This makes it ideal for those who carry much higher debt balances.

SoFi Personal Loans

  • Annual Percentage Rate (APR)

    8.99% - 29.49% when you sign up for autopay

  • Loan purpose

    Debt consolidation/refinancing, home improvement, relocation assistance or medical expenses

  • Loan amounts

    $5,000 to $100,000

  • Terms

    24 to 84 months

  • Credit needed

    Good to excellent

  • Origination fee

    No fees required

  • Early payoff penalty


  • Late fee


Terms apply.

6. Find a financial planner you'll enjoy working with

A financial planner can help you navigate life's largest financial challenges so you can reach your goals. It can really help to have another perspective from someone who's an expert in the space and that's exactly with a CFP can do.

You can use a service like Zoe Financial to search for nearby financial planners who specialize in the areas you need the most help with. Your first consultation call is typically free, so you can speak with the CFP to figure out if they're right for you and if they're someone you'll have a good experience working with.

Bottom line

While 2022 was a financially tumultuous year with many twists and turns, there are steps every individual can take to walk into 2023 feeling a little more prepared. Building an emergency fund and creating plans for making large purchases and paying down debt are some of the most important things you can do as you close out the year. But don't forget to always seek professional help for personalized recommendations.

Catch up on Select's in-depth coverage of personal financetech and toolswellness and more, and follow us on FacebookInstagram and Twitter to stay up to date.

*Results will vary. Not all payments are boost-eligible.  Some users may not receive an improved score or approval odds. Not all lenders use Experian credit files, and not all lenders use scores impacted by Experian Boost. Learn more.

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
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