How to save money right now: Editing your budgets for 2023
How to save money right now: Editing your budgets for 2023
Written by the Millennial Trader
If you feel this last year has just been one neverending drain of income, you’re not alone. Thanks to rising inflation, saving money is more challenging than ever before. A recession is looming, and the economy is planning as best as it can, but the real work has to get done by you. No one will save you from the unknown except your present self. The future of the U.S. economy is still up in the air for 2023. We don’t know what surprises are around the corner, so our financial futures depend on our current choices.
We must shift our focus from making more money to cutting back on spending. The market will pick up eventually, and your portfolio will be safe to resume your regular trading or investing schedule, but now is the time to get frugal. In this article, I will discuss some simple ways to save money this year to better prepare you for the future. There is no need to worry about making drastic lifestyle changes; like most things in life, the little things that add up over time matter most. These sustainable and straightforward tips will help you change your spending habits and significantly save you money in the long run.
It is incredibly discouraging to work so hard for the money you make only to see it go down the drain, feeling as though it’s impossible to get ahead, you are not alone. There are things we cannot control, like ‘shrink-flation’ (paying more for less product), utility bills skyrocketing, gas prices rising, or any other byproduct of our current inflated economy. According to the recent consumer price index for the Bureau of Labor Statistics, the cost of most consumer items has skyrocketed from the price of milk (up 16%) to electricity bills (up 14%) in the last year (Hillman, 2023). However, there are still things we can control about where our money goes, which is the key we must focus on to get ahead.
1. Track and edit your monthly Expenses
Many of us put off caring for our finances because we don’t know where to start. However, several tools at our disposal can make this process easier. The first thing to do is compartmentalize your issues from most to least urgent and focus on one goal at a time. For example, if you want to focus on cutting down non-necessity monthly expenses (i.e., subscription services), plenty of free downloadable apps can help you. These apps help break down where you are spending most of your money and bring to light some services that drain your account a certain amount each month that you weren’t even aware you still subscribed to. Are you still watching Netflix? What about Hulu? Is that VIP gym membership getting your money’s worth? Maybe you’re still subscribed to that cheese of the month you swore you canceled ages ago. We all have expenses we can cut without even missing, which is a great place to start.
Instead of having a dozen streaming services for music, movie, and TV shows, try focusing on one or two to get your money’s worth. You may find that less is more than enough to satisfy your service needs. There are many apps to help you track these dormant yet continuously charged subscriptions, such as True Bill, Pocket Guard, or even banking apps like Chase, which can notify you of automatic expenses.
2. Cutting out the fluff
Fluff = splurging on things you want but never usually need. Seemingly little innocuous things add up over time, which you can see if you reflect back every month or so. For instance, ordering from UberEats is considered fluff (unnecessary expenses of tax, tip, delivery, and price) when you already have a fridge full of groceries about to expire. Fluff can also be your daily latte from Starbucks, which is $5 or more for a small size (‘shrinkflation’). If you make your coffee at home and get a latte just once a week, you could save yourself over $120 a month!
Most of us don’t think small treats like food or coffee are harmful, but once we buy them habitually, we start bleeding money we’ve been trying to save. Therefore, to keep yourself accountable for this fluff, it helps to make special savings accounts to keep track of that coffee or food money when you choose not to spend it. Apps like Acorn even invest that money, so you’ll see a great return on your investment just from skipping your Nonfat latte every morning! These apps help switch your perspective to the long run, trading immediate gratification for the long-term well-being of your future self.
3. Paying down your debt
Paying the minimum amount on your loans or credit cards is the equivalent of digging a hole while someone else pours more dirt in—you’ll never get out of debt this way. If you say you don’t have enough money to pay more each month, look at your fluff or subscription services and use that money instead. Creating a separate account to bring some perspective to your spending habits allows you to see all the money you actually have to spend and get yourself out of debt sooner.
Reviewing finances is not something anyone enjoys doing; reflecting on where all your money has gone is not an enjoyable task, but it is necessary, especially given the current state of our economy. Many of us find it easier to ignore the continuous purchases on our debit cards and let our credit debt build up, only to deal with it when forced to. However, these habits will become an incredible detriment if we continue them into the recession this year.
You don’t have to live like a monk and stop buying things that bring you joy. You just have to stay on top of what those things are. These times of reflection will help set ourselves up for success in 2023 by evaluating what we can and can’t live without, and usually even end up finding money by canceling stuff we didn’t even know we were still paying for.