Save more, spend less: How to take financial control in 2023

INDIANAPOLIS (WISH) — With rising inflation affecting everything from grocery costs to energy bills, many Hoosiers are looking for ways to save more and spend less.

A lot of people struggle to save money, according to Rachel Cruz, a financial expert with Ramsey Solutions. In a recent Ramsey Solutions study, nearly 4 in 10 Americans reported have $0 in savings.

The first step to saving money is creating a budget, Cruz says.

“A budget is your roadmap to figure out, ‘Hey, how do I get savings?’ and, ‘How do I cut back on expenses?’” Cruz said. “You want to do a zero-based budget. You want to focus first on food, housing, transportation, and utilities. Those are going to be your top priorities.”

The next step is cutting out things that aren’t a priority and using that money to build up a $1,000 emergency fund, Cruz says.

“Your starter emergency fund is going to help lead you into getting out of debt. This is really about taking control of your money instead of your money controlling you.”

Cruz also suggests using the “debt snowball” method.

“You pay off those smaller bills first and it kind of builds momentum because then you get to pay off some of the bigger debt as you navigate through it,” Cruz said.

Creating a budget and paying off debt can help eliminate a lot of financial stress. Cruz says money and fear often go hand-in-hand, especially when money is tight.

“Be very specific about your fear. There are a lot of scary things going on in the economy, and when you think about the economy, you can be fearful and make bad decisions. Be very specific: ‘Hey, is my job at risk? Are we having to move? Is the house we want to buy more expensive than it was 18 months ago?’. Focus on facts. Don’t let the emotion take over — fear is a terrible financial advisor.”

To learn more, visit the Ramsey Solutions website.