Refocusing Your Budget in 2023

Refocusing Your Budget in 2023? Start Here!

January is almost over…does that mean it’s too late to say “Happy New Year”? I am going to go with no…because it’s not February yet. So, Happy New Year!

Whether we are ready or not, 2023 is here. And that means that people are making resolutions or goals for the twelve months ahead. Do you set new year’s resolutions or goals? It turns out about 40% of Americans make resolutions at the start of a new year. And one of the most common areas people resolve to change is their finances. According to Market Watch, 53% of people who made new year’s resolutions for 2023 made financial resolutions.

If you are feeling ready to get on top of your finances, eliminate your financial stress, and reach your financial goals, the new year may be the fresh start you are looking for to get the ball rolling. But it can be tricky to know exactly where to start. And where you start is important. It can have an impact on where you finish and if you are successful. If you are refocusing your budget in 2023, but don’t know where to start, read on!

Know Your Numbers

Often, when I help people get a spending plan set up, they want to jump right in and start estimating what they spend or what they think they “should” spend in various categories. While this can feel productive and makes you feel like you are off to a good start, these numbers are often just guesses. This leaves a lot of room for unknowns. It also can cause you to miss the mark or miss expenses altogether. When this happens you may go over budget quickly and feel like it’s not worth it. Instead, it is important when refocusing your budget to find your actual numbers and look to understand them. Here are the key numbers to find and how to use them to build a successful budget. You’ll want to determine your income and understand your expenses.


When refocusing your budget, the first number you want to know and understand is your income. Understanding your income gives you a good starting point for your expense plan. To find your income look at pay stubs and past bank statements to see how much you are typically earning in a month. If you are salaried you can look at a few checks and you’ll have a good idea of how much you make each month.  

If you are an hourly worker or work on commission, it is important to look at at least six months of pay information. Look over the numbers and take an average to see what you can typically count on making. If there are a few big months or you receive bonuses you can leave those numbers out of the calculations to find a lower average that might be more representative of a regular month for you. 

Be sure to capture all sources of income. This may include your main job or jobs, any side hustles you have, income from any others that contribute to your household, money that comes from any support or assistance programs, and any income earned on investments. Knowing your income will give you a realistic amount that flows into your account each month. This number will also help you understand what you can reasonably spend, save, or invest each month.


Once you know your income, it’s time to become familiar with your spending habits. Refocusing your budget in 2023 requires you to know both sides of the personal finance equation –income and spending. This will help you make informed spending, saving, and investing decisions. To make understanding your expenses easier, I find it helpful to break your expenses into three categories.

Fixed Expenses

The first category of expenses to look at is your fixed expenses. These are expenses that you know the amounts for and that don’t change from month to month.  Things like your rent/mortgage, insurance premiums, utility  bills (if they are the same each month), debt repayments, savings amounts, cell phone bills, subscriptions or membership fees, childcare expenses, costs for medication or other health and mental health services, and any other expenses that you pay each month and that cost the same amount.

It is best to start with the fixed expense category because you will be able to find all of the amounts and due dates of these bills. To find these expenses look over your past six months of bank record and credit card statements. Highlight those expenses that come up at the same time and cost the same amount each month. Then make a list of fixed expenses, the due dates, and the amounts that you owe.

Flexible or Optional Expenses

The next category of expenses you want to consider when you are refocusing your budget are your flexible, or optional, expenses. These are expenses that you have each month, but for which the amounts may change. In this category include things like groceries, gas/transportation, eating out, experiences and entertainment, coffee or drinks with friends, gifts, and any other expenses you see come up regularly on your bank statements where the amounts vary from month to month. 

Review your bank statements and credit card bills for the past six months. Highlight the flexible expenses you see. Then take an average for each type of expense. This will help you get a ballpark for normal spending in this area. It will also give you a baseline for your flexible expenses which will help you in your efforts refocusing your budget in 2023.

Non-Monthly Expenses

The final category of expenses to look at are the non-monthly expenses that you face each year. To find these expenses, look at your spending for the past year and find any bills you pay at frequencies after than monthly. This may include things like property taxes, income taxes, insurance premiums (if paid annually or semi-annually), car registrations, and any other payments you may have. It’s important to look over a full year of your expenses to be sure you capture all of your non-monthly expenses.

Knowing how much you need to pay and in what frequency gives you good information about your annual spending. It also helps you avoid busting your budget when the bills come due. Often, non monthly bills aren’t planned for throughout the year, so in the month they are due people scramble to pay them, sometimes at the determinant to their other goals. Instead, you can spread the expenses out across your annual budget by breaking them into smaller pieces. If you want to work on breaking your big bills down, take a look at my blog post “How to Avoid Big Bill Sneak Up

A Few Things to Keep in Mind

When you are just starting out, refocusing your budget can be intimidating and even overwhelming. Breaking it into pieces can help. It will still have you gathering the relevant information and learning what you need to know, but it will keep you from information overload.

Remember…you can’t change what you did in the past, but you can use it to inform the future.

As you get to know your numbers, remember to give yourself a bit of grace. Try to look at them as someone impartial who is just reviewing data. You can’t change what you did in the past, but you can use it to inform the future.

Once you’ve reviewed your numbers, it can help to take a step back and give your budget a day or two before you settle in and decide what to cut back on or cut out entirely. It also helps to set some specific goals for your finances that you can track and measure. And it’s ok if one of those goals is checking in with your spending once a week – in fact, it should be! Schedule a time to look over your spending for the previous week and look to the week ahead to see what might be coming up. Above all else, remember that your budget doesn’t have to be perfect to work, and you don’t have to do it alone! 
If you’d like support as you get started, schedule a free 30-minute clarity call to learn about how I can support you through financial coaching.

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