2022 will go down as a rough year financially for many people. Stock prices have dropped, inflation is at a 40-year high, and recession fear is everywhere you turn. However, that doesn’t mean you can’t make 2023 your year to shine financially. Here are five short-term financial goals that you can start practicing in the new year.

1. Live within your means

Start living by the golden rule of finance, which is spending less than what you earn. No matter how much money you may make at your job or how many things you have, you may never truly be wealthy or experience true financial freedom until you can tame your expenses.

This can be accomplished by creating a budget. Starting on January 1st, commit to planning out your purchases so that there are no surprises. Regularly track your purchases using a spreadsheet or budgeting app, and ensure that they’re well within your income limits.

2. Contribute to a retirement plan

For some people, retirement might feel like it’s decades away. But the ironic thing about this is that “now” is a great time to start saving and building your nest egg. This has to do with the way that compound interest works. The earlier you invest, the more time your contributions have to compound and build upon one another. Therefore, the sooner you get started, the greater your nest egg could grow to become.

3. Pay off your debts

High interest and long-term debt are the enemies of increasing your net worth. Even supposedly “good” loans like a mortgage can result in tens of thousands of dollars in interest you’ll pay to the bank over the life of your payments. Keep more of your own money by paying off those debts as early as possible.

One technique you can try is the debt snowball method. This is where you make a list of each of your debts, put them in order from smallest to largest balance, and then put all your focus on paying off the smallest one first. As you move from one debt to the next, roll the funds from the prior debt into the payment for the next one, making larger payments each time (like a snowball rolling down a hill).

4. Build an emergency fund

If there’s anything to be learned from the COVID pandemic, it’s that you need to always have an emergency fund ready. That’s why if you don’t already have a stash of cash that you can readily access at a moment’s notice, 2023 would be a good time to start. An emergency fund should contain at least three to six times your monthly expenses. It’s also helpful to keep it separate from your everyday checking or savings account. A good way you can build an emergency fund is to contribute to it as if it was a retirement fund. Deferring any raises or one-time bonuses will also help speed up the process.

5. Raise your credit score

Your credit score influences more in your life than you probably realize. Even if you’re not thinking about getting a new credit card or borrowing money, you always want to be taking action to build your rating as high as it can go.

One way to do this is to practice good financial habits. Pay your bills on time and in full every month. Also, don’t use any more than 30 percent of your available credit limit, and keep the number of credit checks to a minimum.

The bottom line

Make 2023 one of the best financial years of your life. Start by budgeting your money, eliminating your debt, and boosting your credit score. At the same time, protect your future by building up an emergency fund and saving more for retirement.