Prepping to buy a home or invest in 2023?

It has been quite the year. In 2022, we have lived through high inflation, stock market lows, housing-market frenzies and ongoing Federal Reserve rate hikes. Although we don't have a crystal ball to predict what will happen to the economy next year, we could use this year's events as a guide: Things may continue to be rocky.

If homeownership and investing are on your 2023 goals list, here are some questions to ask yourself before whipping out your spreadsheet, money apps or notebooks.

Whether you have a goal of buying a new home or renting a new place next year, there's a lot to consider. For instance, 30-year fixed mortgage rates went from an average of 3.45% in January to 6.90% in October thanks to inflation and Fed rate increases. The Fed has already raised interest rates 75 basis points four times this year. This, coupled with housing shortages, has driven the national median price of homes above $400,000 for the first time, according to the National Association of Realtors.

Homeownership may still be an attainable goal, but you might have to make some sacrifices, said Zaneilia Harris, a certified financial planner in Maryland.

"You need to evaluate what you are willing to give up in space in order to own property," Harris says. "You may have to gradually get to where you want, as opposed to just going straight into a single-family house."

Another portal to homeownership Harris recommends is the Neighborhood Assistance Corporation of America, also known as NACA. It's a mortgage program that allows working people to purchase a home with no down payment, closing costs, fees or stringent credit prerequisites.

How diverse is my portfolio? This year hasn't been the greenest for investors — at the start of December, the S&P 500 was down more than 15% this year. The market's volatility could understandably make investors unsure about how to move forward. Financial professionals say a diverse portfolio and taking the right amount of risk might be steps in the right direction.

"Unfortunately, a lot of newer investors were very excited about Bitcoin, crypto, [and] all of that, and forgot those lessons," Wright said. "You don't put your short-term money into the market, and those rules always apply."

Wright considers short-term money to be cash you'll need in 12 months to three years.

Instead of putting all of your money into the stock market, put the amount you will need in the near future into an emergency fund, high-yield savings accounts, a certificate of deposit or short-term fixed-income securities like Treasury bills, Wright said.

Ask yourself how much risk you are comfortable taking, Harris said. That depends a lot on your circumstances, but risk isn't something to be afraid of when you have enough income, an emergency fund and a diverse portfolio, she says. And risk is worth it when you invest for the long term and can reap those long-term rewards.