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How can I budget to be financially fit in 2023?

24th January 2023

Follow this simple step-by-step guide to take control and make the most of your money this year.

New year, new budget. The holidays are over, and now is the perfect time to take a closer look at your finances so you can make the most of your money in 2023.

Budgeting doesn’t always come naturally but it’s an important first step to staying in control, and being as prepared as you can for any nasty surprises. Having a clear picture of what’s coming in, what’s going out and what you might need to save up for will always help.

Try this step-by-step guide to get you started. Happy planning!

Get real - document your income and expenses

Taking an honest look at your finances means knowing exactly what’s coming in and going out.

It sounds simple but it can be tricky to keep track so sit down and make a note of all your sources of income - include everything from your wages or pension, overtime and bonuses, to benefits, allowances and any extras such as income from a side hustle. Write another list of ALL your outgoings. As well as essential bills like fuel, rent or mortgage payments and council tax add all other spending, including food, nights out, treats, travel, clothes, hobbies, subscriptions, and self-care such as hair appointments and gym memberships.

Make sure to include irregular and one-off spending too, such as an annual car service and MOT, birthdays, celebrations such as Christmas and Diwali, school trips and holidays. It may help to add them up and divide by 12 to give you an idea of the average monthly cost.

Compare and contrast

Once you’ve drawn up your income and expenses sheet, take time to thoroughly review it. The most important question is does your income cover your outgoings? If it does, then do you have scope to save more? Will your budget still balance if fuel bills go up, your rent rises or your mortgage rate increases?

Stick with it

Managing money and sticking to a budget can be tough, but there are ways to create healthier habits that will pay off in the long run.

Be realistic

Set long-term goals and be prepared to wait to see the results. If you are paying off debts or borrowing it may take a while - be consistent and track accounts as you pay them down to keep you motivated. You could even stick a chart on the fridge as a reminder of how well you are doing.

Make regular saving a part of your monthly budget

Setting up a standing order to a savings account will help you get into the habit of saving. By treating saving like paying a bill, you’ll forget you’re doing it and before you know it the amounts will start to add up. Make sure you set an affordable amount - being consistent, means that even a small investment will generate a handy nest egg over time.

Build up a rainy day fund

Set aside a savings account for emergencies only. That way, if you do have an unexpected expense - such as car problems or a broken boiler - you can sort it out with less impact on your budget that month.

Use savings pots

As well as your emergency fund, you can set up a range of savings pots to save for different things.

These can be digital, within your online bank account - for example TSB’s Spend & Save current account lets you create up to five separate pots.

For smaller amounts and regular or daily spending, you can also make physical pots, by dividing money up into envelopes or bags (sometimes known as ‘cash stuffing’), to use for different things.

Plan ahead

There are a range of free tools to help you manage your money and pay bills.

Setting up Direct Debits and standing orders will make sure you never miss payments and take the stress out of staying on top of things.

Timing is important. Set payment dates that work for you - a few days after you get paid is usually a good idea.

How TSB can help you give budgeting a go for 2023

TSB has a range of tools to help you make the most of your money and manage your finances. You can also use an online tool such as Money Helper.

Or book an appointment with a Money Confidence Expert by video, in a branch or at one of our pop-up’s. Find out more and book an appointment here: Book an Appointment Online | Money & Debt Advice | TSB Bank