Getting real about your money goals in 2023 starts with laying out your budget. Don’t push it off. With a budget, you’ll always know how much you have to spend — and not spend. And, as with a diet, if you indulge in one thing, you’ll know you need to cut back on another.
Start with what you have. In the era of side gigs, your income may be a bunch of smaller jobs that add up. You might have a traditional salary. Maybe you have both. Do you have a partner? He/she/they can contribute to the asset side, too.
What comes next? Look at debits and debts. Look at monthly expenses. These are usually the easiest to track. Rent, gas and electric, groceries, gas for the car or a pass for the bus or subway. Don’t forget to add the bills that come at six-month and 12-month intervals. (We’re looking at you, car insurance.)
Then start to itemize the “surprise” daily costs of living. Happy hours, birthday gifts, dry cleaning, personal-care products (FYI, in general, women pay more for skin products, hair products, razors and deodorant than men2). Regular mani-pedis, monthly pet grooming (and new squeaky toys) add up. And how they add up over the length of a year can derail the best laid plans.
You don’t have to look at it as “cutting out.” Consider the idea of “extensions”. Extend the length of time between appointments that fall on a calendar. Five weeks for that trim instead of four. Six weeks for the dog grooming. Extend your drinks at happy hour by drinking water between each alcoholic drink. Your debit account will thank you today (and your head will thank you tomorrow morning).
With unplanned purchases, consider the difference between “I need it” and “I want it.” Defer the “I wants” to a time when you’re not focused on the new year’s savings plan. Remember: This isn’t forever; it’s until you reach your goal.