What are your financial priorities for 2023?

Another new year is here, and let’s hope it’s a good one!

Many people make resolutions for the coming year. Often they are to do with losing weight, getting fit, or spending more time doing what you love. And often they don’t last very long!

Another major thing on many peoples’ wish lists for 2023 is to get their finances sorted. But particularly in the current economic climate of rising costs of living, is there any hope this can happen?

In this article we focus on five aspects of sorting out your finances in 2023: 

• Earn more money.
• Spend less money.
• Pay off debts.
• Save more money.
• Invest for the future.

For each of the above we will give five quick tips on how you may be able to make improvements in this area. Not everything is relevant to everyone, but even if you can find a few tips that might work for you, they could lead to some positive changes in 2023.

How to earn more money in 2023

• Start looking for another job that will pay more. The thought of changing jobs can be daunting, but many employers are reporting job shortages at the moment, so it could be a good time to make a move.
• Take on some extra work to supplement your current job, even just on a temporary basis. For example a couple of shifts in a local bar or restaurant, or a weekend job in a store, salon or library. Or perhaps offer a service such as babysitting or pet sitting in your local area.
• Do you have skills or talents that you could make money from as a sideline? Whether you can bake, sew, write, proofread, do computer work or photography, there may well be people out there willing to pay for your services.
• Sell goods online. Whether you simply declutter your home and sell your own stuff, or start buying and reselling particular types of goods, you could make extra money by doing this.
• Rent out any spare space in your home. Have you considered taking in a lodger, renting out your driveway for parking or your shed for storage? If you have space that you are not using, there may be someone else who will pay to use it.

How to spend less money in 2023

• Make a fresh start in 2023 by creating a realistic monthly budget then working hard to stick to it. Knowing how much money you have coming in and where it all goes is the first step to sorting out your finances.
• Check all your regular expenses to make sure you are not paying for anything you don’t need (eg out of date subscriptions) and also that you are getting the best deal possible. You can compare the cost of different providers of services such as phone, TV, broadband, and insurance on websites such as Money Supermarket, Compare the Market and USwitch. 
• Start planning your food shopping more carefully. Our article How to beat the rising price of food shopping contains lots of hints and tips about how to do this.
• You can also save money on clothes and household goods by not always buying new. You can often find good quality nearly new goods from charity shops, local ads, or online sites such as eBay, Facebook Marketplace and local social media groups. 
• One way to save money on extras such as hairdressing, spa treatments, decorating, DIY, gardening, babysitters, pet sitters etc is if you can find friends who have these skills and would be willing to provide them in return for something you can do for them. 

How to pay off debts in 2023

• Debt is a huge problem in the UK as we go into 2023. But there are things you can do to start climbing out of debt? The first thing to do is to make a list of everything you owe, and how much you are spending on debt repayments every month. This can be very scary but it can also be motivating to see how much money you could have once the debts are gone.
• Plan the order in which you would like to pay your debts back. For example, it may be the smallest one, to get a quick success. Or you may prefer to tackle the one with the highest rate of interest. Set yourself a challenge to do everything you can to get rid of this one debt as quickly as you can.
• Remember it’s important to still keep up with all your other debt repayments even when focusing particularly on one. Otherwise your credit score could be affected. 
• If you have so many different debts that it’s hard to keep track of them, you may find it helpful to take out a new quick loan to repay everything and be left with just one monthly payment to make. You could then focus all your efforts into paying off this one remaining debt.
• If you have any savings it’s also a good idea to pay some into your debts. Even though interest rates for savers are beginning to increase, your money could still work harder for you by reducing your debts.

How to save more money in 2023

• As we saw in our recent article Is it really possible to have savings any more?, a quarter of UK adults have less than £100 savings, or no savings at all. But experts recommend that you try and build up savings of at least 3 months salary, to protect you from a variety of different circumstances.

Here are four savings tips from our previous article:

• Daily no-spend decisions – making small choices every day to not spend money.
• A regular savings challenge – putting aside small amounts of money on a regular basis.
• Fundraising for yourself – going all out to make a bit of extra money just for you.
• Saving any unexpected money – save any gifts / wins / bonuses instead of spending them.

How to invest for the future in 2023

• If you are managing to save money, it’s a good idea to lock away a portion of that for the longer term future. Your future self will thank you!
• Longer term savings have a wider range of savings options available. For example:
  • Notice accounts.
  • Bonds.
  • Premium bonds.
  • ISA or LISA.
  • Stocks and shares.

We will explore some of these options in future articles.

• One of the best ways to save for the future is to have one or more pensions. If your employer has a workplace pension, make sure you are enrolled in it. You may also be able to pay a little bit more into that pension scheme on top of the standard contributions. If not, consider setting up a private pension either as well or instead of a work pension. 
• Another good way to invest for the future is to buy your own home. Mortgage rates are beginning to settle and house prices are falling, so if this is something you have been thinking about and working towards, 2023 could be the year to make it happen.
• One of the most significant investments you can make for the future is in yourself! If you have always wanted to gain more educational or vocational qualifications, perhaps to give you a chance to get a better job or change your career completely, perhaps now is the time to start making that happen? 

We hope that some of the above tips are useful, and will help you to plan your financial priorities for 2023. 

Good luck! And remember to check back here again soon for more financial and lifestyle tips from Loans 2 Go.