It’s been quite the year. We’ve seen high inflation, stock market lows and housing market panics in 2022. There have also been ongoing Federal Reserve rate increases. We don’t know what the future holds for the economy, but we can use this year’s experience as a guide. Things could continue to be rough.

Before you start to create your spreadsheets, money apps, or notebooks, if homeownership and investment are your 2023 goals, here are some questions.

Before you start to create your spreadsheets, money apps, or notebooks, if homeownership and investment are your 2023 goals, here are some questions.

What space am I willing and able to give up?

There are many things to think about, whether you’re looking to buy a home or rent a place in the next year.

Inflation and Fed rate rises led to 30-year fixed mortgage rates increasing from 3.45% in January to 6.90% by October. In 2022, the Fed increased interest rates by 75 basis point four times. The Fed recently increased its benchmark rate by 0.50 percentage points.

According to the National Association of Realtors, this, along with housing shortages, has resulted in the national median home price exceeding $400,000 for the first-ever time.

Although homeownership is still possible, you may have to make sacrifices.

Although homeownership is still possible, you may have to make sacrifices.

Harris states that you need to consider what space you are willing and able to sacrifice in order to own your property. Harris says that you may need to work your way up, rather than just moving into a single-family home span>

Harris suggests that this could be done by purchasing a condo or townhouse first, then using the equity to buy your next property.

What can I do to make homeownership more affordable for my family?

Harris also recommends the Neighborhood Assistance Corporation of America (also known as NACA). This mortgage program allows working people to buy a home without any down payment, closing costs, or credit requirements.

Members can also purchase their homes at below-market interest rates. Currently, the program is available in 28 states and District of Columbia.

Jocelyn Wright, a CFP, and a retirement income certified professional at PF Wealth Management Group, Bala Cynwyd (Pennsylvania), says that buying a house in 2023 may be easier if you are willing to share a room. She did this with her sister in 2017.

She says, “It’s probably not going to last forever necessarily, but it gave us the chance to have our home, and we can leverage all that equity going forward.”

How diverse is your portfolio?

Investors have not had the best year in 2022. Near the end of December, S&P 500 fell almost 20%. Investors may be uncertain about their options due to market volatility. Financial professionals suggest diversifying your portfolio and taking the right level of risk as steps to move in the right direction.

Keep diversification in mind, says Wright. Diversification means investing in multiple assets to manage market volatility and risk. It is important to not invest too heavily in one area, as the BlockFi and FTX collapses in November serve as a reminder.

Wright states that “Unfortunately, many new investors were very excited by Bitcoin, crypto [and] all the other things and forgot those lessons.” You shouldn’t invest your short-term capital in the market and these rules always apply .”

Wright defines short-term money as cash that you will need within 12 to 3 years.

Wright suggests that you don’t invest all your money in the stock market. Instead, place the money you will need in the near future in an emergency fund or high-yield savings accounts. Also, consider a certificate, certificate of deposit, or short-term fixed income securities such as Treasury bills.

What level of risk am I willing to take?

Harris suggests asking Harris how much risk are you comfortable taking. It all depends on your situation, but there is no reason to fear if you have sufficient income, an emergency fund, and a diverse portfolio. When you are looking for long-term returns and a long-term investment, the risk is worth it.

Harris believes that younger people, who are farther away from retirement, can and should take on more risk. Harris, who is Black, says that some people of color have been reluctant to take on risk in the past. But she also wants them to keep in mind the risk/reward combination.

You can still invest if you aren’t ready to start investing or if you feel like you don’t have the time.

Harris says, “You need to invest and feel comfortable with that, no matter if it’s biweekly or bimonthly.”

This article was written and published originally by The Associated Press by NerdWallet.