Personal Finance: What to Know for 2023

What are some of the new wrinkles in this year’s personal finance situation? For starters, home-based workers can get more of a tax deduction for many of their expenses. But even more important is the continuation of such manoeuvres as co-signing on student loans, higher limits on IRA contributions, and fresh tactics for getting the most out of grocery discounts. Technology, particularly widespread access to the internet and free financial apps, is one of the major game-changers for working adults who want to maximize the power of their earnings and keep monthly expenses as low as possible. Here are details about some of the main points to know for 2023.

You Can Cosign for Someone’s Student Loan

As the cost of higher education continues to rise in 2023, many parents and others wonder if they can help a prospective college student who is applying for college loans. The answer is yes; it is easy to assist a child, friend, coworker, or anyone else who needs a cosigner on their loan application. Additionally, graduates can do a student loan refinance with a cosigner on debt they accrued while attending college. The concept behind cosigning on original education loans or refinancing agreements is simple. The cosigner’s credit score and history are used by the lender to evaluate the application. Many thousands of adults have gained approval only because they had a cosigner.

IRA Contribution Limits are Higher

There are new IRA contribution limits for 2023, which can make a big difference for those who want to leverage the tax advantage of contributing to a plan or setting up a brand-new one. If you are 50 or older, you can put $7,500 into a traditional or Roth account. For those who won’t reach their 50th birthday during the calendar year, the limit is slightly less, at $6,500. Note that couples can double their savings power by each setting up a separate IRA and contributing the max.

That means a husband and wife who are both over 50 in 2023 can sock a total of $15,000 toward retirement. It’s also wise to consider the additional boost most can get by using after-tax money, which is what Roth IRAs are all about. That way, while you are on the hook for taxes on the money now, you won’t have to ever pay on the withdrawal or the accumulated earnings in the future.

Shop Strategically to Save on Groceries

What is strategic shopping? It’s a smart way to spend money on groceries, household goods, and everything else, including online purchases. There are three elements to the process. First, use specific lists when shopping for anything. A list helps prevent the urge to make impulse buys. Second, sign up with a reputable, no-fee coupon app online and asterisk each list item for which you can use a coupon. Finally, consider paying a modest annual fee of about $50 to join a wholesale club that offers bulk sized items and generally lower pricing than traditional grocery stores. The beauty of strategic shopping is that you don’t have to be a financial maven to save between 5% and 15% on monthly food purchases and standard household items.