Tips You Can Follow in 2023 That Will Benefit Your Finances

As we kick off 2023, we get to start off fresh again knowing a couple financial facts that may prove useful in the future. The two main areas of interest break down as follows:

  • Record high inflation: According to recent statistics, inflation in the United States was up 7.7 percent when comparing October 2022 to the same time period a year ago. Although some of that was caused by government spending, much of that had to do with supply chain issues and the inability to increase supply levels to meet demand. This resulted in big ticket items (ex: vehicles, homes) and day-to-day essentials going up in price across the board.
  • The Fed is raising interest rates: The country is taking some steps to deal with the inflation issue. Most notably, they are steadily increasing interest rates on loans and home mortgages. By doing this, demand is naturally decreased on goods and services, which usually results in inflation going down. However, this is a slow process that won’t fix the inflation issue overnight.

What Does This Mean Moving Forward Into 2023?

Considering that the inflation issue is nowhere close to being solved and interest rates will continue to go up, this means that consumers will need to get back to the basics when it comes to banking and budgeting. There is roughly 8 percent of inflation that Americans need to offset, and that will either take the form of cutting down expenses, making more income, finding better ways to bank and invest, or some combination of the three.

Basic Budgeting 101

If you’re like most Americans, you know exactly how much gross income will be coming into your household every month. Additionally, you should also know the approximate amounts you’ll owe on things like your mortgage, auto loans, insurance, utility bills, tuition, and so forth.

The disconnect that most people have is with essential items such as groceries, gasoline, and things of that nature that don’t appear on a bill. People also need to be wary of non-essential items that fall into the category of entertainment or leisure. This includes things like streaming services, dinners at restaurants, and so forth. 

Real budgeting occurs when people think about the essential and non-essential items that don’t show up on monthly bills. Review your last few months of statements and see which items are draining your budget unnecessarily. Using a spreadsheet to track essential vs. non-essential items is always helpful. You may not be able to offset 8 percent by reducing expenditures alone, but it’s certainly a good start.

Maximize Your Banking with Free Checking Accounts and Other Methods

The other way that you can improve your budget is by going with a bank that offers low overhead banking and advantageous lending terms to borrowers. The following are some attributes to keep an eye out for:

Free checking accounts: The checking account is one of the most basic services a bank can offer. So, why should a customer have to pay a monthly fee simply to keep their money there? The blunt answer is that they shouldn’t, which is why individuals are encouraged to look for banks that offer free checking accounts. If you’ve been looking for banks near you with free checking, Verimore Bank is more than happy to set you up with an account. 

Carefully evaluate personal loans and automobile loans: As previously mentioned, The Fed is steadily increasing interest rates in an effort to reduce inflation. This means that it’s more important than ever in 2023 to carefully evaluate personal loans and automobile loans before signing anything. It’s also worth noting that automobiles are especially high in price right now due to the semiconductor chip shortage. Holding off on a big loan until inflation goes down might be the best strategy, and it will help your monthly budget, too.

Money market accounts: A money market account operates in a similar fashion to a savings account in that it accrues interest, but it also comes with the ability to write checks and use a debit card using those funds. The advantage of money market accounts is they generally have higher interest earnings than savings accounts. The main drawback is that some money market accounts require very high minimum balances to avoid fees. Those who are disciplined with their accounts generally benefit from money market accounts. 

Looking for a Bank Near You with Free Checking? Contact Verimore Bank Today!

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