15 Practical Ways to Improve Your Finances in 2023

The start of a new year is a great time to re-evaluate your current financial situation and begin to implement changes that will have a big impact on your overall financial picture.

Some people love New Year’s Resolutions, and others hate them. Regardless of whether or not you create resolutions, there are plenty of ways you can improve your own finances in the coming year.

In this article, you’ll find 15 practical and actionable ways to improve your finances in 2023.

1. Set Financial Goals

One of the most important things you can do is set financial goals. Your goals are determined by whatever is important to you, and they help to give you direction and purpose.

My suggestion is to create a goal (or a couple of goals) for 2023 and then also create a few long-term goals as well.

Your goals should be specific and measurable, and should also have an end date or deadline.

For example, a good goal would be to save $5,000 by the end of 2023. And an example of a bad goal could be something vague like “reducing debt” (it’s not measurable and has no deadline).

Your financial goals could involve things like:

• Paying down debt
• Saving and investing
• Creating an emergency fund
• Making money
• Net worth achievements

2. Create a Budget

The budget is an important part of any financial plan. If you don’t already have a budget, now is a great time to create one.

Having an established personal or family budget is one of the best ways to get the most out of your money and reduce waste.

Creating a budget may sound intimidating if you have never done it before, but it’s not hard. I wrote an article, How to Create a Budget That Works, that shows exactly what you need to do.

3. Identify Your Priorities

Budgeting is a topic that evokes negative feelings. Most people associate a budget with limiting how they can spend money.

In reality, a budget actually gives you control over how you spend your money, and it allows you to determine your own priorities.

While it is important to live within your means, you don’t need to be stingy and cut back in every single aspect of your life.

Creating a budget will help you to determine which expenses are the most important to you and your family (if you have a family). You can allocate your money according to your own priorities.

You don’t have to cut back in every area. The key is to know your priorities and save in the areas that don’t matter as much to you.

Personally, clothes don’t really matter to me. I spend as little money as possible on clothes, and my wife is the same. We also eat almost all of our meals at home and eat maybe one meal a week from a restaurant. Cutting back in those areas that don’t matter to us allows us to spend more money on other things that do matter.

Related reading: Cheap vs. Frugal

4. Track Your Expenses

While creating a budget is important, tracking your expenses is equally important. The budget doesn’t do you any good if you don’t know how your money is actually being spent.

You’ll need to decide on a system for tracking and recording your expenses. You can either use a simple approach like a spreadsheet or use an app like Empower.

If you’re manually entering expenses into a spreadsheet, I recommend recording expenses each day, so you don’t miss anything.

5. Track Your Net Worth

Net worth gives a big-picture look at your overall financial situation. It’s much more indicative of wealth than how much you make. You can make a lot of money, spend it all, and have nothing to show for it.

Related reading: 9 Convincing Reasons Why You Should Be Tracking Your Net Worth

If you want to build wealth, you should be paying attention to your net worth. Unfortunately, most people don’t know their net worth.

About four years ago, I started tracking my net worth, and I wish I would have started earlier. My financial goals involve net worth, so it only makes sense that I track it regularly.

Seeing my net worth has been a great motivator and has caused me to think about how each financial decision will impact my net worth.

I use the free app Empower to track net worth, and I highly recommend it. In just a few minutes, you can create an account and link all of your financial accounts. You can see and track your net worth from the Empower dashboard. You’ll also have access to a lot of handy reports.

6. Pay Down Debt

If you have high-interest debt like credit cards or personal loans, paying off that debt as soon as possible should be a priority. Student loans, car loans, and medical bills can also be attacked.

Mortgages are typically at a lower interest rate and not considered bad debt, but it’s up to you if you want to pay off your mortgage early. There are definitely some benefits, even though the interest rate may not kill you.

There are a few different approaches you can take if you’re going to aggressively pay down your debt. The most common strategies are the debt snowball and the debt avalanche. If you’re unfamiliar with these approaches, please read the Debt Snowball vs. Debt Avalanche article.

7. Maximize Your Credit Card Rewards

Credit cards can do a lot of damage to your finances if you’re not careful. However, if you manage a credit card well, you can get a lot of free rewards.

I’ve used a credit card since I was 18 (I’m 44 now), and I use it for almost every expense. I put as many purchases and bills as possible on a credit card because of the rewards and cash back I earn.

If you pay your credit card balance in full each month, rewards cards have a big upside. I earn anywhere from 2% – 10% cashback on purchases I would be making anyway, just by using the right credit card.

For starters, I recommend getting a good “everyday” cashback or rewards card that you can use for all of your purchases. I use a cash rewards card with 2% cashback for all purchases.

If you want to take it a step further, you can get other credit cards that earn higher amounts of cashback for specific purchases. For example, the Chase Freedom card pays 5% on purchases in specific categories that rotate each quarter.

That’s just a quick summary, but if you are interested in cashback and rewards, I have two articles that you’ll want to check out:

• 11 Ways to Maximize Your Credit Card Rewards and Cash Back
• How to Stack Rewards and Cash Back

8. Automate Your Savings

Let’s face it. Most of us aren’t as disciplined with saving as we should be. We may have good intentions, but it’s easy to get distracted by life and forget to set money aside.

The best way to overcome this is to automate your savings, and there are a few different ways you can go about it.

If you have a 401(k) plan through your employer, you can set up a certain percentage of your pay to be automatically contributed. This money will go into your 401(k) each pay period before you even see the money.

If you have a 401(k) plan available, you should take advantage of it. Your contributions will reduce your taxable income, and most employers will match at least a small percentage.

Aside from 401(k) contributions, you can also set up automated savings in other ways. One of the easiest and most practical ways is to set up an automated transfer from a checking account to a savings account each month. Almost every bank makes this very easy to set up through your online banking account.

Setting up an automated transfer assures that you’ll save money, and you don’t even need to do anything.

9. Reduce Your Recurring Bills

If you want to have a big impact on your finances in 2023, you should focus on reducing your monthly recurring bills. Even small savings here will really add up over the course of the year.

There are a few ongoing bills that are great options for reductions:

• Cell phone bills
• Cable bills
• Insurance premiums
• Gym memberships

A few years ago, my wife and I switched from a plan with a major cell phone carrier to a discount pre-paid carrier. That simple change cut our monthly cell phone bill in half, and it had no negative impact on our lives. We’re now with Cricket Wireless, and our coverage is just as good, if not better, than what we had before.

If you sign up for Cricket Wireless through my referral link, you can get a $25 account credit.

Another significant change we made in our house was getting rid of cable. We cut the cord about 7 years ago and have been saving money ever since. We use Netflix for the majority of the TV shows and movies that we watch, and during football season, I also get a Sling membership so I can get the ESPN channels.

Related reading: 10 of the Best Cable Alternatives for Saving Big Money

10. Start a Side Hustle

Sometimes the best thing you can do for your finances is to make a little extra money. A side hustle can be anything that brings in money outside of your job.

There are endless options, and if you’re looking for some ideas, I have a huge list of more than 150 side hustle ideas that should inspire you.

Personally, I’m a big fan of side hustles. My business started as a side hustle in 2007 (I’ve been at it full-time since 2008).

Even making just a couple hundred dollars per month from a side hustle can hugely impact your finances. That money can be used to pay down debt or invest in the future.

11. Create Passive Income Streams

If you’re like me and you hope to retire early and live off dividends, creating passive income streams is something that you should focus on.

Passive income doesn’t take much of your effort to create, and it can replace your job when the income gets high enough.

There are several excellent possibilities for creating passive income. I won’t go into the details here, but you can see my article on passive income ideas for plenty of possibilities.

12. Learn to Wait on Purchases

If I had to pick a single financial habit that has saved me the most money over the years, I would say it’s been waiting on purchases.

Make an effort to wait at least a day or two on any purchase that’s not a necessity. When I wait, I often ultimately decide I don’t need the thing I was considering purchasing.

Impulse spending is a bad habit that can eat away at your finances. You can avoid a lot of buyer’s remorse and bad expenses by simply waiting. Make an effort this year to get in the habit of waiting.

13. Take Advantage of Free Money

What’s better than free money?

It may sound too good to be true, but there are several ways to get free, easy money. I tried to find and take advantage of these offers, and I’ve compiled some of the best ones on my Free Money page. Just head there, and you’ll find some great options.

Just to highlight a couple of my favorites:

• MissingMoney.com is an awesome website that helps you to find money that is rightfully yours. Just enter your name and state (or state where you previously lived), and it will search for your missing money. I got more than $100 from 5 minutes or less using the site.
• MobileXpression is a free app that pays you just for access to your mobile internet browsing history. It’s an easy way to get $50 per year in free money.

14. Declutter

Most Americans, myself included, have too much stuff. Our houses, garages, and sheds are full of many things we don’t use or need.

In 2023, you can make an effort to declutter and eliminate the things you don’t need. You can sell things of value, donate them, or throw them in the trash.

Decluttering can help you to get into the mentality of cutting back and saving money. On top of that, you can make some decent money from selling your things.

My wife and I had a yard sale for the past two years. Getting rid of stuff felt great, and we made more than $400 each year from those things that we weren’t using.

15. Commit to One Lifestyle Change

There are many different ways we can impact our finances by making simple lifestyle changes. These are usually things we do repeatedly that cost us money and may not be necessary.

Here are a few examples of lifestyle changes you could make this year:

• Pack your lunch
• Eat more meals at home and fewer at restaurants
• Skip the daily trip to Starbucks
• Drink less alcohol
• Ride a bike more, and drive less
• Have Netflix movie nights at home instead of going to the theater.

Of course, there are plenty of other possibilities. Take a look at your own habits and see what changes you could make in 2022 to improve your finances.

Putting it Into Action

Talking about these things is great, but ultimately none of this matters if it is not put into action.

Now that you’ve read through the list, pick a few items that stand out to you and can commit to taking action in the coming year.