ArcaMax

Every year, Ilyce and Sam offer their readers New Year’s resolutions for home buyers, sellers and their personal finances. These are their personal finance resolutions for 2023.

As we finish the third year of the pandemic, money and credit issues continue to weigh heavily on the minds of most Americans.

Let’s take a moment and recap the financial repercussions of the pandemic: In February 2020, the unemployment rate was 3.5%, according to the Federal Reserve Bank of St. Louis. By April, it was nearly 15%. Some 22.4 million jobs were lost between March and April 2020, and put an end to the great economic expansion in history, according to the Bureau of Labor Statistics. The unemployment rate for women reached 16.1%, as female employees dropped out of the workforce to care for sick relatives and manage children who were learning to do schoolwork via Zoom. Many more people lost contract work, gig jobs and other labor that wasn’t counted.

By January 2021, the unemployment rate was 6.4%. By September 2022, it had fallen to 3.5%, touching the lowest levels in decades. It was the steepest rise and decline in U.S. unemployment, ever.

But over those two and a half years, there was a lot of personal financial angst, as millions wondered how bills would get paid and whether anyone would go back to work.

The government responded by sending checks to most U.S. households, many of which got banked and helped Americans save more than they had in decades. Americans stayed home and didn’t spend much. The 45 million Americans who have federal student loans found their loan repayments paused. There was help for homeowners who couldn’t pay their mortgages, and for those who couldn’t manage rent payments, which like home prices was soon skyrocketing.

As we begin 2023, that financial anxiety seems to be in the distant past. With the Great Resignation, there are two jobs open for every person looking. Employers are providing wage increases of more than 5%. They’re also paying new hires more. The lowest wage workers are willing to accept for a new job increased to nearly $74,000, according to a survey from the New York Federal Reserve Bank.

While employees are earning more, they’re also spending. According to the New York Federal Reserve Bank, Americans were carrying $925 billion in credit card debt in the third quarter of 2022, just shy of the $927 billion all-time record set in the fourth quarter of 2019. As of November 2022, 63% of Americans were living paycheck-to-paycheck, according to a LendingClub report. That’s just under the all-time high of 64%, seen in March. The question is, what happens when student loan debt finally restarts?

If you need a little help getting your own financial train back on track this year, consider adopting these financial resolutions:

Financial Resolution No. 1: Spend less.

...continued