The start of a new year is a time for setting goals and creating good habits. For lots of people, this means improving their budgeting and saving more money. So how can you tackle debt, spend less, and save more in 2023?
Here are 15 New budget and money saving tips to see you through the year ahead.
1. Plan your finances for the year ahead
Get off to a good start by making a financial plan for the year. This can be as simple or as complicated as you like. The important thing is to account and plan for any changes to your income or outgoings throughout the year.
For example, if you’re expecting to take part in ongoing strike action, your income may take a hit. Try to reduce your unnecessary expenses in these months. If you’re planning a wedding or intending to try for a baby, you may want to start saving in advance.
Make a monthly plan of your income and outgoings for each month. You can also plan how much you’ll save or invest every month. And don’t forget to budget for fun activities, too.
2. Make some extra cash
A good way to make sure you have enough money throughout the year is to take on some extra work. This could be through another organisation, or you could start your own small business. Here are some popular ways to make a little extra cash:
Rent out your spare room to a lodger or holidaymakers
Look after your neighbours’ pets through online cat or dog sitting services
Sell handmade goods on Etsy
Become a delivery driver or courier.
3. Tackle debt
If your debts are mounting up, make 2023 the year you finally do something about it. Debt management isn’t easy, but it is achievable with the right support. Get financial advice from trustworthy sources. Charities like StepChange are designed to help you get your finances back on track.
Create a debt management plan for the year ahead. StepChange will help you create a DMP without charging a fee. If a DMP isn’t right for you, they’ll help you find a more appropriate option.
4. Find the right savings account for you
If you’re trying to save money in 2023, you need to find the right savings account. Sharia-compliant savings accounts are popular with Muslims and ethical savers, while ROSCAs are a popular informal way to save with family and friends.
Other options include credit unions and premium bonds. See 5 savings account alternatives in the UK.
5. Create an emergency fund
An emergency fund will help you if unexpected expenses crop up throughout the year, or if you lose your main source of income. So if you’re debt-free (apart from your mortgage and/or student loan), it’s a good idea to set up an emergency fund.
Aim to save 3 to 6 months’ worth of outgoings in your emergency fund. This will tide you over in case you need to look for a new job, or pay unexpected bills. Put your emergency cash in a separate savings account or space so you’re not tempted to spend it.
6. Insure your important possessions
Insurance can also help you protect yourself and your belongings from unexpected scenarios.
As well as standard policies like house insurance and car insurance, consider taking out life insurance and/or cheap policies to cover expensive items like laptops or TVs.
7. Make the most of what you own
There’s no need to replace your belongings unless they’re broken. For example, it’s often cheaper to switch to a SIM-only contract with your existing phone than to get a new handset.
Apply this mindset to all your belongings. Ask yourself if you really need to replace things, or if they can be fixed or upcycled to prolong their lifespan.
8. Work on your credit score
Thinking about getting a mortgage in 2023? You’ll need to make sure your credit score gives a good reflection of your finances.
It takes a long time to build up your credit score, especially if you’re a new resident in the UK. Find out everything you need to know about building a UK credit score.
9. Talk about money
Don’t be secretive when it comes to your finances. Create a culture among your friends and family where you can be open about money, share advice, and make sure everyone has the support they need.
This also extends to children. Talking about money in simple terms will help them understand your financial decisions, and help them better manage their own finances as they get older.
10. Pay your bills by direct debit
Paying rent and bills by direct debit or standing order means you’ll never miss a payment. This reduces the risk of damaging your credit score or being cut off by suppliers.
Set up direct debit payments for all your regular payments. Make sure you have enough money in your account beforehand to avoid going overdrawn and being charged by your bank.
11. Exchange unwanted gifts
If you received gifts you don’t need for Christmas, consider exchanging them for more useful items, or selling them online. While this may feel unfair to those who bought the gifts, it’s better for someone else to make use of them if you won’t.
Sites like Vinted, eBay, and Olio allow you to sell, give, or lend clothing, food, and other items to other people.
12. Book travel in advance
Making plans to see loved ones later in the year? Whether you’re travelling for Lunar New Year or another event in 2023, book travel early to get the best deals. Sites like SplitMyFare can also help you find cheaper train travel deals.
13. Use your bike
For those shorter journeys, try to walk or cycle as much as possible. This saves on fuel and public transport fares, helps you stay fit, and is better for the environment.
14. Don’t get disheartened
The best laid plans often go awry. So if you get unexpected bills, or you don’t manage to save as much as you thought you could, try not to get disheartened and start spending unnecessarily.
Try to accept the situation, adjust your financial plan if you need to, and move on to the next month with optimism.
15. Think about the future
Keep an eye on the next few years (and beyond) when making financial decisions. Intergenerational wealth planning isn’t easy when you’re juggling your current finances as well; but it can be done.
Find out how to build generational wealth for your family in the UK.