The start of a new year means more than college bowl games and New Year’s resolutions. It is also the perfect time to review your 2022 budget and create one for 2023. Use our process to nail down new goals and start the new year on a positive financial note.
Reflect on Your 2022 Budget
Before you look forward, you need to look back. Pinpoint what went well and what you struggled with financially. Your answers to these three questions will tell you what you need to work on.
- What were your wins, such as eating out less or saving more?
- What categories did you overspend or underspend on?
- Was your budgeting method intuitive and easy to follow?
If your answer to the last question is “no,” consider adopting a new budgeting method in 2023. Learn how to prepare a budget using new methods like the 50/30/20 rule.
Review and Address Your Debt
Everyone can prioritize debt elimination, regardless of income level. List your debts, including student loans, mortgages, auto loans and credit card debt. Decrease the time you need to pay off that debt by using a proven strategy, such as the debt avalanche or debt snowball method.
What Expenses Will You Have in 2023?
Many will be the same as in 2022, but life changes can impact your budgeting. Are you expecting a new baby? Are you planning a wedding? Then make room in your budget for diapers or the wedding DJ you want.
Set Your Financial Goals
Working toward a goal, such as saving for a down payment on a new house, requires long-term planning. Set realistic, specific aims, like “saving $5,000 for a new car” vs. “buying a new car.” If you have a spouse, discuss your needs vs. your wants in the coming year.
Create a 2023 Budget That Aligns with Your Financial Goals
Wondering how to create a budget? Begin by writing down your monthly income and your monthly bills. Then set spending limits on extras and determine how much will go to savings. Keep our tips in mind:
- When preparing a budget, leave room for fun. You will burn out if you eliminate every meal out or movie night.
- Experiment with different budgeting methods, such as the cash envelope system, to see what works best for you.
- Switch to digital banking to automate bill payments and check your account balance using your phone.
- Use high-interest credit cards sparingly and pay off the balance each month.
- Budget for savings in addition to your expenses. Creating or contributing to an emergency fund, for example, sets you up for a worry-free future.
Download your 2023 Budget Checklist to help prepare for the new year.
With proactive planning, you can stay motivated to save money in 2023 while reaching your unique financial New Year’s resolutions. Members 1st can help. We offer services like MyConcierge™ and our varied savings options, and you can use digital banking to transfer money into your savings each month. Stick to your budget and enjoy the new year!