(WKBN) — As the new year approaches, it’s a good time to get your finances in order.

There are several steps you can take to put yourself in good financial shape heading into 2023.

John Ryan with Mediate Financial recommends the 50-30-20 rule, which can be broken down the following way:

  • 50% of your income goes toward needs
  • 30% of your income goes toward leisure activities, holidays and other like-to-haves
  • 20% of your income goes toward paying off debt, saving and investing

Ryan says it all comes back to budgeting.

“It’s really kind of the time to review your risk — know what you can take, know where you want to be, your goals,” Ryan says. “If you’re closer to retirement, you probably don’t want to be as risky as a 20-year-old that has most of their life ahead of them.”

Ryan recommends considering a higher emergency fund because of inflation, as well as assessing any debt you may have racked up over the holiday season and coming up with a plan to pay it off.