We study the correlated quantum magnet, YbCl$_3$, with neutron scattering, magnetic susceptibility, and heat capacity measurements. The crystal field Hamiltonian is determined through simultaneous refinements of the inelastic neutron scattering and magnetization data. The ground state doublet is well isolated from the other crystal field levels and results in an effective spin-1/2 system with local easy plane anisotropy at low temperature. Cold neutron spectroscopy shows low energy excitations that are consistent with nearest neighbor antiferromagnetic correlations of reduced dimensionality.