Money saving tips for 2023

(Image credit: Illustrated | Getty Images)

published 6 January 2023

Kiplinger logo

A recent study by MarketWatch found that of those who are setting financial resolutions for the new year, 57 percent are aiming to save more money. If you're part of that group of hopeful savers, there are a number of ways you can step it up financially in 2023, from taking full advantage of available tax breaks to automating bill payment and savings account contributions.

If you have access to a company retirement plan, take advantage of it to the full extent possible for your financial situation. You'll not only enjoy tax-deferred retirement savings, but you also could rake in some free money if your employer offers matching contributions. Aim to contribute at least enough to secure the full employer match offered. And if you have any extra funds kicking around — say, from a recent raise at work — consider contributing a bit extra to your retirement fund.

If you have a health insurance policy that's health savings account (HSA) eligible, that can be another smart way to save in the new year. Contributions to an HSA are tax-deductible (or pre-tax, if they're made through your employer). The money then grows tax-deferred, and withdrawals made for eligible medical costs are tax-free. According to a recent study by ValuePenguin, an HSA can save an individual $840 a year on taxes, whereas a family could save as much as $1,679 per year.

Subscribe to The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE

https://cdn.mos.cms.futurecdn.net/flexiimages/jacafc5zvs1692883516.jpg

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Usually, you'll lose any money in a health-care flexible-spending account by the end of the year if you don't use it. But now, many employers offer a grace period during which you can use your money leftover from the prior year. It's smart to spend that money before it disappears, whether it's on new glasses, prescription drugs, or doctor's appointments. You can then put the money you otherwise would have spent on those costs into savings.

Check in to find out what your employer is offering, whether it's perks for signing up for health assessment or biometric screening, participating in a fitness program, or reaching particular health goals. Additionally, your employer may provide discounts on gym memberships, access to a fitness coach or nutritionist, or a weight-loss program. Some employers even offer tools that make it easier to compare costs between health-care providers and to save on prescriptions.

Another way to save is to look over your bills for any sneaky fees that you can avoid. Some common spots to keep your eyes peeled for fees are your bank account, your credit card, and your retirement. To steer clear of bank account fees, for instance, aim to only take out cash at fee-free ATMs, regularly check your account balance to avoid overdrafts, and make sure you maintain any minimum balance required to avoid monthly maintenance fees.

You're able to check your credit report for free once a year through the website AnnualCreditReport.com, and doing so can lead to savings down the road. That's because your credit report and score can affect the interest rates you receive when borrowing, and even your ability to secure an apartment or get a job. An error or any fraudulent activity that shows up on your credit report could easily drag down your score, so keep an eye out for those issues and report them promptly.

You're inevitably going to have to spend, so why not make your money work for you when you do? Two ways of doing this are by stashing your savings in a high-interest savings account, such as those in the table below, and opting for a credit card that offers generous rewards. If you had a card that offered 2 percent cash-back rewards on all purchases, for example, and you charged $2,000 a month to your card, that could net you $30 each month in savings — or $360 a year.

This might seem like a no-brainer way to save, but there are likely unexpected or overlooked areas where you could cut back. For instance, you could pay up to $40 less each month on your cable bill by bundling cable and internet, Nerdwallet reports. Other possible ways to cut spending include canceling subscriptions you're not using often, enhancing your home's energy efficiency to reduce your electric bill, refinancing loans to secure a lower interest rate, or avoiding impulse spending at the grocery store by making a list and sticking to it.

Saving is certainly important, but it's likely to be tough going with a mountain of high-interest debt. And the longer you have your debt, the bigger it will become, since interest continues adding up over time. Coming up with a plan to tackle debt head on — whether through a debt consolidation loan or a debt payoff strategy like the debt snowball or avalanche — can help you wave goodbye to debt so that money can go into your savings account rather than toward interest charges.

Explore More

Becca Stanek has worked as an editor and writer in the personal finance space since 2017. She previously served as a deputy editor and later a managing editor overseeing investing and savings content at LendingTree and as an editor at the financial startup SmartAsset, where she focused on retirement- and financial-adviser-related content. Before that, Becca was a staff writer at The Week, primarily contributing to Speed Reads.