After a busy year, it can be tempting to kick off your shoes, settle in with a cup of hot cocoa, and focus on 2023, but that would be a missed opportunity to explore how to improve your financial health. Amid the holiday season and all the joy (and spending) it brings, this year we also have wild inflation and a volatile market – making it a real balancing act to try to reach ends meet while keeping things cheerful and bright.
With all of this in mind, now is a great time to organize your resources so you’re better prepared to navigate today’s tough economic environment without sacrificing your financial future. Here are five simple steps you can take to both regain control of the current pressure on your portfolio and continue building for a better tomorrow.
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1. Ask for help.
Did you know that many employers provide access to education, counseling and financial resources as part of their benefits package? Otherwise, You’re in Good Company: Our Second Annual State of the Workplace Survey (opens in a new tab) showed that 47% of employees never thought about or didn’t know if they were allowed to contact their employer for help.
We also found that 90% of employees and 96% of HR managers prioritize reassessing benefits this year, and an overwhelming 96% of HR managers agree that their company needs to do a better job of helping employees to maximize financial benefits. offered to them.
In a way, this is great news: this is a time when you have the opportunity to make your voice heard and where many employers are paying close attention. Companies are emphasizing holistic financial wellness practices by 2023, such as financial wellness programs, benefits for caregivers (including flexible work hours for employees who are caregivers), telehealth, mental health benefits and equity-based compensation. (opens in a new tab).
Take the time today to reach out to your workplace for support. Check to see if your company offers additional financial benefits or support – you never know if you don’t ask.
2. Educate yourself.
Before buying gifts for everyone on your list, give yourself the gift of information. The end of the year is a good time to develop your financial knowledge and skills and review your financial plan – or make one, if you haven’t already.
What is a financial plan? It can be as simple as creating a monthly budget or saving $10 a month, or as complex as working with a team of professionals on everything from wealth management to estate planning. If you’re not sure where to start, there are plenty of tools online to help you figure out your budgeting and saving goals.
Many workplaces also offer financial education resources on topics ranging from basic budgeting and investing to retirement planning and education costs, and some even offer access to financial advisors. or to coaches.
There may also be employee resource groups or additional training available on more specialized topics to help you develop greater confidence and skills to deal with your unique financial situation – such as racial justice, change climate, gender equality and more.
Another important topic is taxes, which are right around the corner. Although your place of work probably cannot provide tax advice, they may be able to help connect you to information or more specialized financial professionals who can help you.
3. Rock the workplace.
The end of the year is also usually the time when companies invite employees to make choices about their health care and other benefits for the coming year. If cost and affordability are your top concerns this season, you’re not alone: Nearly two-thirds (60%) of employees in the State of the Workplace Study (opens in a new tab) told us they’re paying a lot more attention to reviewing their workplace financial benefits this year.
Open enrollment season is an opportunity to become more familiar with your company’s comprehensive support system as well as the technology you’ll be using the rest of the year to navigate your benefits. Even if nothing has changed, take advantage of any training, webinars, and engagement campaigns your employer may offer. It can also be helpful to sit down and assess how you used your benefits throughout 2022 and how your needs might be similar or different next year.
If you’ve already completed your enrollment or are enjoying partner benefits, don’t worry: many employers also offer other financial benefits that you can access throughout the year, classics like discounts on gym memberships and commuter benefits to comprehensive financial wellness suites. and individual financial coaching.
4. Plan to save.
Savings can often be the first thing we give up when money is tight, if we have any savings at all – according to the Benefits Research Institute (EBRI) (opens in a new tab)a typical working family doesn’t even have a month’s worth of saved income outside of a retirement account.
Although it may seem counterintuitive, do whatever you can to avoid dipping into your savings to cover bills or expenses, and do your best to keep increasing your savings (even if it means reducing your spending by holidays). Start as small as necessary and figure out what works for your lifestyle – maybe just put in $5 a month.
That said, fully funding your employer-sponsored retirement plan to earn any consideration offered by the company is an effective and efficient way to invest in your financial future. Consider using the last few months of 2022 to try to maximize your contributions to your retirement plan: according to the IRS (opens in a new tab)in 2022, you can save up to $20,500 through your 401(k) plan, with up to $6,500 in additional contributions for those age 50 and older, and up to $6,000 in an account Individual Retirement Plan (IRA), plus an additional $1,000 if you’re 50 or older.
5. Be your own best friend.
Life happens, but there are always steps we can take to help understand our financial affairs better (rather than letting our financial affairs take hold of us). It can be difficult to find a balance, but consider prioritizing your financial health today as a way to become your future self’s best friend.
Stay focused on what you need, ask for help when you need it, and use this time to put all your ducks in a row so you can prepare for better financial health – in 2023 and beyond.
This article has been prepared for informational purposes only. The information and data contained in the article were obtained from sources outside of Morgan Stanley. Morgan Stanley makes no representations or warranties as to the accuracy or completeness of information or data from sources outside of Morgan Stanley. It does not provide personalized investment advice and has been prepared without regard to the individual financial circumstances and goals of those who receive it. The strategies and/or investments discussed in this article may not be suitable for all investors. Morgan Stanley recommends that investors independently evaluate specific investments and strategies, and encourages investors to seek the advice of a financial advisor. The suitability of a particular investment or strategy will depend on the investor’s individual circumstances and objectives.
Morgan Stanley at Work, Morgan Stanley Smith Barney LLC and its affiliates and employees do not provide legal or tax advice. You should always consult and rely on your own legal and/or tax advisors.
Morgan Stanley at Work services are provided by Morgan Stanley Smith Barney LLC, member SIPCand its affiliates, all wholly owned subsidiaries of Morgan Stanley.
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This article was written by and presents the views of our contributing advisor, not Kiplinger’s editorial staff. You can check advisor records with the SEC (opens in a new tab) or with FINRA (opens in a new tab).
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