: 5 easy, but consequential, actions to take before 2023 to boost your finances

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Forget about New Year’s resolutions. Keep it simple with these “one and done” steps now. Best of all, they will improve your financial situation for the whole of 2023.

Here are five things to do today:

1. Increase your 401(k) contributions to the max: In 2023, you can contribute a lot more to your retirement account. The maximum 401(k) contribution elective salary deferral is $ 22,500, up from $ 20,500 in 2022. If you are 50 or older, the catch-up provision allows an additional $ 7,500 to be put into retirement, up $ 1,000 from 2022. (That is a total of $ 3,000 more into retirement and lower income taxes too.) If you have been setting-and-forgetting your contribution at work, now is the time to make the change.

Bonus tip for 2022: There are two reasons you may want to make the increase now rather than wait for the first paycheck of the year. First, if you earned a raise this year, you may have forgotten to increase contributions. Second, if you expect to receive an end-of-year bonus, then more is available for your 401(k). Even one paycheck can increase your contribution and tax savings this year.

2. Pay any deductible expenses in 2022: The standard deduction is $ 12,950 for singles and $ 25,950 for couples in 2022. If you are close to being able to itemize, consider paying some 2023 deductible expenses this year and earning the deduction. Doubling up on a charitable donation or paying in full for medical procedures may cost you dollars this year but will save you in federal income taxes. Also consider paying real estate taxes or other taxes that qualify for itemization. No organization will mind having the extra money a few months ahead of time. Just be sure to keep solid records of why you could itemize this year. In 2023, you will still qualify for the standard deduction.

Note: Disaster losses do qualify as an itemized deduction. If you were hit with major losses from wildfires, hurricanes or another disaster, pull your numbers together before the end of the year. Better yet, meet with your accountant now to understand the impact on your taxes and what you need. Though you cannot bring back your home, the tax savings will help with your next steps and keep some extra cash in your pocket. There are no limits on itemized deductions in 2022, as that was eliminated by the Tax Cuts and Jobs Act, meaning taking a full disaster loss in one year is possible.

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3. Increase insurance deductibles: Inflation will impact this industry more than most in the coming year. In Florida, one resident received a home insurance invoice for more than double last year’s premium. Similar increases are expected across the country as the industry is reeling from catastrophic losses from wildfires and hurricanes.

By shopping around and increasing your deductible, you have some control over lowering your insurance costs. According to Jim Laberge of Laberge Insurance in Middlebury, Vt.: “Lots of variables go into pricing your premium but your time is always well spent talking to your agent to be sure all your available discounts are taken into account.” Increasing the deductible from $ 250 to $ 500 on your car insurance makes sense if you have the $ 500 to cover any damages you will be responsible for paying if there is an accident. One of Laberge’s policy holders just raised their home deductible from $ 500 to $ 1,000 and saved 7% in the process. “The larger the premium, the more the savings,” Laberge says. He was quick to emphasize that you ought to keep the coverage you need rather than just focusing on saving money.

4. Consolidate monthly digital subscriptions: Americans spend over $ 200 a month on subscriptions without knowing it. Tracking them down and especially how you are paying for them can get unwieldly, because of the myriad services for music, videos, clothing and software. This leads about 42 % of subscribers to forget about a recurring expense when they are paying automatically. Organizing where your money goes creates financial peace of mind while allowing you to make sound decisions before committing to another subscription service. If you arrange all the monthly charges on one credit card — or even better, a designated checking account — you will have a clear picture of your spending. Then, if income loss or a job layoff affects you, you know where to turn first to cut expenses. And in the process of consolidating, you may just have the urge to cut monthly subscriptions and save money.

5. Diversify direct deposit: Most employees pick one account to deposit their paycheck. Instead, create a system to have your paycheck directly deposited to different accounts based on your needs. By setting up safety-savings, college-fund and home or mortgage accounts, and having the balance go to your checking account, you know what you can spend monthly. Most payroll services allow up to five places for your paycheck to go. As one client told me last week: “Once I made the time commitment to arrange this way and organize the accounts, this system simplifies my life.”

The tips above boil down to organizing your finances, which have been proven to provide financial well-being and wealth gains.

CD Moriarty is a certified financial planner, a columnist for MarketWatch and a personal-finance speaker. She blogs at MoneyPeace.