I Want to Save Thousands More in 2023. I Won’t Be Cutting My Budget to Do It. Here’s Why

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Cutting your budget may not always be the best way to increase your savings. 

I have some big purchases planned in the near future, so I’ve made a decision to increase my savings account balance by thousands of dollars in 2023. By saving more money, I can pay for the things I need without having to worry about going into credit card debt or taking out a loan for purchases.

When you’re looking to save more money, many financial experts will tell you to start by taking a look at your budget. Specifically, many experts advise identifying cuts you can make so you can move more of your money into your savings account instead of spending it on discretionary purchases such as dining out or clothing or entertainment.

I’m not going to cut my budget, though. In fact, I’m not even aiming to reduce my spending at all despite the fact I want to funnel a ton more cash into a savings account. And there’s a simple and important reason for that.

This is why I’m not interested in cutting my budget

While reducing spending and reallocating money to savings seems to make sense on the surface, there’s a few problems with this approach.

First, there’s a limit to how much you can actually cut out of your budget. Everyone needs to eat, get to work, buy clothing, have a place to live, and cover utility costs. As a result of these and other essential expenses, it’s really hard to get your spending below a certain minimum threshold — at least not without making drastic and often uncomfortable and unsustainable life changes.

Second, constantly trying to cut your budget to accomplish your financial goals isn’t likely to be a successful approach in the long run. You’ll end up taking everything that’s actually fun and that enables you to enjoy life out of your budget and may find yourself miserable and unable to stick to your plans. In fact, splurges are inevitable if you try to slash your budget too much by removing discretionary spending.

I don’t want to spend the next few months or longer living a life of deprivation just to squeeze a few extra pennies out of my budget so I can make a meager impact on my savings. And since I’m already not wasting money because I made my budget to align with my values and priorities, that’s exactly what I’d be doing if I cut my budget further.

Here’s what I am going to do instead

Since I don’t want to cut my budget but I want to move more money into savings, I have to make some type of change.

That change is going to be increasing my income. I’ll be focusing on making more money this year than I did in the past. I’ve chosen to devote my energies to earning more rather than spending less because there’s no upper limit on earnings, and taking steps to make more money will allow me to still enjoy life while hopefully funneling even more extra cash into savings than I would be able to if I looked for budget cuts.

The good news is, there are tons of opportunities out there to earn more money — whether that means doing a little extra work at a current job or taking on a side hustle. Devoting time to finding these opportunities can make a much bigger difference than budget cuts ever will.

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The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Christy Bieber has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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