With the new year approaching, many people are ramping up to get their finances in order.  

And with good reason. With a likely recession around the corner, having the correct financial strategy and following it through can help reduce stress and lead to a better 2023.   

Here are 5 innovative financial strategies to follow ahead of the new year.  

Create a Diverse Investment Plan 

Whenever the word investing comes up, many people tend to shy away, feeling inept at the prospect.   

While you don’t necessarily need to be an investment banker, learning and having different investment vehicles can act as a cushion during hard times. It’s also great to build wealth and secure your financial future.  

Depending on your risk appetite and financial goals, there are several investments that can appeal to you.  

Government bonds, provident funds, pension funds, and recurring deposits have significant compounding interests and have been around long enough, making them great for first-time and “passive” investors.  

Investing in Cryptocurrencies can also make for a great strategy depending on the method used. If you’re new to the space and wondering where to trade, platforms like Bitcoin Union offer a convenient place to trade.  

Have a Budget and Track Your Expenses  

Creating and implementing a budget is one of the most significant components of a great financial strategy that has been touted for decades and will continue to be praised. With the standards of living continuing to increase daily, having a budget enables you to have a birds-eye view of your living expenses.   

With several how-to guides available on the internet, getting started has never been easier.  

Having a budget also helps you track and review your expenses to see how and where your money goes, helping you cut out trivial costs and giving more urgent expenses more funding. 

A starting point you can use is allocating a certain percentage of your pay to essential utilities, other loans, credit payments, and any other forms of debt you may have accrued. 

There are several different ways of budget keeping, and several budget management apps on the market and budget trackers to help you navigate.  

Save Wisely 

One of the most effective financial strategies that can set you on the right track is saving. Whether in your early 20s,30s, or 40s, developing and sustaining a saving culture can give you the freedom to invest and live your life knowing you have financial security and freedom.  

If you find saving to be hard, consider automating. Your savings will be directly deducted from your checking account if employed, minimizing the urge not to save. This can help you build your savings and isn’t reliant on your discipline. If you’re an entrepreneur, consider opening a direct deposit account and having your savings directed to your account. Should you get a tax refund, put that money aside towards a goal you might have or into a high-yielding savings account or money market fund. 

The goal isn’t to have money stashed somewhere but to make your money work for you and help you achieve financial freedom in the long run. Also, taking advantage of tax breaks can help out with getting some cash on the side to help with saving.  

Create an Emergency Fund 

According to a YouGov survey conducted in May 2022, 49 % of adult Americans couldn’t afford to pay for a $400 emergency expense. While that number is staggering, it’s not unheard of. Certain financial advisors suggest a 3–6-month fund that can sustain your living expenses; however, aim for a 12-month or even higher if possible.   

Here are a couple of ways that you can boost your emergency fund:  

• Consider getting a second job  
• Look for a side hustle that can help beef up your emergency fund.  
• Get creative. If you have a spare room, consider renting it on air BnB. 

Tighten the Belt Where Possible 

Living frugally/penny-pinching is something that numerous billionaires have endorsed. While it’s probably not the source of their immense wealth, living frugally can help fund specific goals and spark creativity.  

If you eat out twice a week, consider grabbing some groceries and recreating a favorite meal that you would have ordered at the restaurant. Consider downgrading your car to a more affordable one and getting a room/flat mate if you can help. It can end up saving you a couple of hundred bucks a month.  

Also, consider doing a financial audit every three months. Check to see whether you have any standing charges on apps that you no longer use or find valuable. Look at your monthly subscriptions. You might find that you last used certain services a long time ago, and they are burning the proverbial hole in your pocket. 

Taking advantage of money-back apps can help you save a couple of bucks, plus look for banks that don’t charge annual fees / require a certain standing amount.  

Bottom Line 

Following these strategies is the first step toward the right decision. Whether you’re looking to achieve your long-term goals or get out of credit card debt, this list can help with the perfect strategy and get you on the right track to total financial independence in 2023 and beyond.