How to manage your finances in 2023
Given the economic hellscape of 2022, which saw inflation and the crash of the crypto market, managing your finances should be one of your New Year’s resolutions. It’s a good idea to resolve to get your financial life in order, if you saw your purchasing power shrink last year (especially after an always expensive December). The trouble with new resolutions, though, is sticking to them. Here are some tips to make your money aspirations for 2023 a reality. Let’s get into it.
Open a high returns account
The first thing to consider is a high returns account. These accounts are a great place to store excess cash, as their return rate means inflation won’t eat into your money. Many of us worry about losing money in the stock and crypto market and forget about losing our purchasing power to inflation. Inflation is a real problem for savings, and one of the best ways to beat inflation is to put your money in a place where it’ll passively earn. Some accounts have interest rates as high as 3%.
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Try a money-saving challenge
The next thing is to try a money-saving challenge. Gather your close friends and try the challenge or join one online. You can save daily, weekly or monthly. For example, saving $10 a week or $50 a month gives you $520 or $600 respectively by the end of the year. While that doesn’t get you to $1,000, it is a good start.
Learn to budget
Tired of hearing the word budget? Sadly, it’s essential to getting your finances in order. If you don’t know where your money is going, it will be tricky to direct some of it into a savings fund. So if you don’t already have a budget for 2023, consider starting with this step. (You can also check our blog post on how to budget on a low income).
You can try the 60/30/10 method, where 60% of your income goes to needs, 30% to wants, and 10% to savings. There are many alternatives to suit your lifestyle.
Transfer extra income into a hard-to-reach savings account
Once your finances are better, you should automatically transfer additional income into a savings account you can’t easily access. To stop the temptation to spend, it’s best not to have the money in your current account at all.
Look for side hustles to diversify your source of income
Finding additional employment is the quickest way to bring in extra income this year. We are in the age of remote working, so it is easy to take on additional work. Just learn new skills such as Coding, Content Creation, Digital Marketing, and UI/UX design. There are many free online courses to bolster those skills, and you may even discover a new passion!
Final thoughts
Resolve to have a better financial life this year. Establish healthy financial habits that can benefit you throughout your life. Don’t worry about starting small. It isn’t about how you start; but how you end.
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