(StatePoint) Many consumers are feeling financial strain after a challenging economic year in 2022. One in three Americans say they are struggling to get by or are in trouble financially, according to Lincoln Financial Group’s Consumer Sentiment Tracker. The study also found that people aren’t necessarily seeing any relief in sight, with 76% believing factors like inflation, market volatility and debt will worsen.
However, there are a few bright spots. Those who had specific financial goals last year were two to three times more likely to say various aspects of their personal finances improved. They were also three times more likely to say they did a great job on their overall financial wellness last year and twice as likely to be optimistic about their finances in 2023. So where should you start in creating and reaching your own financial goals?
“Lincoln’s research underscores the importance of taking a definitive approach,” said Ed Walters, senior vice president, Lincoln Financial Network, the wealth management arm of Lincoln Financial Group. “While financial goals don’t need to be complicated, you should be able to easily track and monitor your progress. Consumers’ wallets are stretched thin with many competing financial priorities, so now is a great time to get back to the basics.”
Lincoln Financial Group recommends setting these three goals to help turn your finances around in the months ahead:
1. Develop and stick to a budget. Keep it simple. Start with fixed expenses like mortgage, rent, savings and car payments, then move to the more flexible expenses like groceries and entertainment. Instead of establishing a fixed amount, bucket the flexible expenses together and adjust how you allocate your money monthly to address your needs and plans for that month. Tap into budgeting calculators and other expense management tools.
2. Save some money from every paycheck. Now that you have a simple budget in place, take a few minutes to review those monthly expenses, from mortgage and car payments to morning coffee. Cutting a little bit here and there may reveal extra money to set aside. Those funds can be put toward an emergency savings account, employer-sponsored retirement plan or college fund, or be used to prioritize investments. You’ll be surprised how quickly a little bit adds up over time.
3. Work with a financial professional. Lincoln’s study found consumers who are advised by financial professionals are more successful in meeting their goals. A financial professional can help tailor a holistic plan to your specific needs, as well as educate you about various insurance and retirement solutions.
“It’s important that you’re honest with yourself about where you are financially and what your goals are,” said Walters. “With a little discipline, knowledge and guidance, you can have a strong financial year and see long-lasting results.”