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How to Budget and Save Money in 2023

April 14, 2023 • Education

The new year is an excellent time to develop better money habits and take control of your budgeting and saving. There is a feeling of a fresh start and a bright future ahead, an opportunity to get on the right financial track. To help our community start the new year right, we've assembled some tips to budget and save money in 2023.

Read below and discover some techniques to build up your savings while learning better money management skills. 


Tips for Budgeting

Creating a budget is often intimidating, worrying if you're doing it right and not finding out if that's the case till already in action. Also, many people have insecurities surrounding financial education, which makes sense considering how personal of an area it is. To help you put together a solid 2023 budget, read through the tips below and implement them into your money management plan. 

Estimate your Income & Expenses

The first step in creating a budget is to know how much money you have to work with every month. Take some time and sit down to list your income after taxes for the past 6 months to average out how much money you have coming in. Averaging is more applicable if your job pays you by the hour or if you're freelance/a contractor than if you're salary, but in either case, you'll want to have an estimate of your monthly income. 

Track Your Expenses

The next step in making a budget for 2023 is to list your monthly expenses and it's important to not only rely on memory. Go through your bank statement for the last month to see what auto-bills you have, regular expenses like groceries, and other non-bill expenses. Also, look for recurring expenses that aren't every month, such as annual memberships or insurance premiums. Any annual expense can be divided up into 12 months and then listed as part of your monthly budget. 

Budget Methods

Now that you know how much money you have coming in and the expenses for every month you can choose a budgeting method. There are many different ways to budget, but depending on your preferences and monetary needs, choose the one that works best for you:

Zero-based: the goal here is to have your monthly expenses equal your monthly income, deciding how every single dollar is spent. The benefit of this method is knowing where all your money is going, but the disadvantage is having no buffer left in your checking account.

Envelope system: cash is king, as the saying goes, and this budgeting method takes inspiration from it. This approach has you withdraw enough cash to cover all your expenses for the month and divide it up between envelopes that are designated for each category. If you're short in one envelope, you'd take it from another instead of going to the bank. The benefit is that you're forced to see how much money you spend rather than swiping a debit or credit card, the downside is that there is a lot of organization. 

50/30/20: This approach has you assign your expenses to one of three categories: needs, wants, and financial goals. From there, 50% of your monthly income would be towards basic needs, 30% to lifestyle, and 20% to debt and savings. Just remember, this isn't dogma and the numbers can be adjusted to reflect your situation such as having a large student loan to pay off. 


Tips for Saving Money

Budgeting is only half the battle, but to save money is the other aspect of having a financially strong start to 2023. Savings is an essential part of being prepared for sudden job loss or emergencies that may await you down the line, something that cannot be skipped no matter the debt you're paying off or the expenses you have. 

Evaluate Subscriptions

Between streaming and gym memberships or games and premium features, you'd be surprised how much money is spent on subscriptions. Like vending machines, we often think of them as a few bucks every month, but that adds up very quickly. Take a good hard look at what subscriptions you use regularly and cancel or pause the rest. Remember, you can always go back to them when they have a deal and you've met your save money goals. 

Automate & Increase Savings

Most online banking systems have an automation feature for different services and accounts they offer, but like sleep, a lot of people put less into savings in favor of spending more on bills. To better help build up your savings, turn on the automation so that the same amount is automatically added to your savings account. By money from your paycheck being placed in your savings as soon as it hits the bank, you don't have to be faced with that decision and can evaluate what goes wear according to your budget with the remaining amount. Typically, you want to put 10% of your paycheck into savings. 

Negotiate Bills

To be clear, not all bills can be negotiated, like gas or electricity. Though, you'd be surprised how ready cell phone and internet companies are to negotiate the prices of their services if you ask nicely or hint you may be leaving for a competitor. There are a lot of promotions that aren't advertised as well, so don't be afraid to call and ask a customer service representative if there is any way to lower your monthly bill. This is also tied in with evaluating subscriptions, read through your mobile and internet plans to see if you're paying for features you never use. 


The Right Financial Start to 2023

We at Canopy Credit Union aim to help people take control of their financial life and assist in their financial literacy. The beginning of the year is the perfect time to get started and begin eliminating debt, building your savings, and budgeting 2023 for growth. 

Interested in begoming a member at Canopy? Learn more here.

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