I set aside $3,000 to splurge this year, and 4 other tactics I'm using to make my budget go further

The author, Ariana Arghandewal. Ariana Arghandewal

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• I'm being more deliberate with how I spend money through no-spend months and gift cards.
• I'm being more thoughtful with my emergency fund and watching the stock market closely.
• I've set aside a specific fund for splurges so I can get myself nice things without going overboard.

After making numerous financial mistakes in my 20s, it took me a while to get my financial house in order. I've since developed the tools necessary to make better financial decisions.

With rising inflation and experts predicting an economic downturn, good financial habits are more important than ever. I've chosen to be proactive in 2023 and protect my finances if things go south. Here are five things I'm doing differently this year with my money.

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1. Stockpiling, followed by no-spend months

I love a good sale. This year, more than ever, I'm taking advantage of sales and discount deals to stockpile essentials. Doing this saves me money in the long run and requires fewer trips to the store, where I'll undoubtedly be tempted into the occasional impulse purchase. Since stockpiling puts a dent in my immediate budget, I'll follow it up with no-spend months to stay on track.

Having had a successful no-spend January, I find value in eliminating some non-essential spending from my budget. I'm happier and more productive. Shopping is time-consuming, and cutting it out of my repertoire has freed up my time and created more space for me to focus on things that give me peace in my daily life. The first stockpile/no-spend months have been a nice balance, so I'll continue doing this for the rest of the year.

2. Extreme budgeting with gift cards

As a frequent traveler, I find sticking to a budget especially challenging. When you're away from home, it's much easier to get carried away and overspend. As someone who likes to stick to a strict budget, I've found gift cards to be helpful tools in achieving this goal. I especially like to use gift cards to budget for monthly entertainment and dining expenses.

My credit card gives me 5% cash back at office supply stores so I buy DoorDash and Netflix gift cards from Staples. This way, I can earn elevated rewards on my recurring subscriptions and keep my meal delivery expenses in check.

I do the same for non-retail purchases. When Visa gift cards go on sale, I pick up a few $200 cards and limit myself to one per month for everyday purchases. It's a great way to keep spending under control, because once the gift card runs out, there is no going over budget.

3. Putting more into my rainy day fund in case of downturns

 I'm a freelance writer by trade, and a downturn could impact my business substantially. Mass layoffs and a volatile stock market are creating a climate of economic uncertainty. As a result, I'm prioritizing putting more money into my rainy day fund to cover another three months of living expenses in case of a downturn. With banks offering attractive APYs on high-yield savings accounts, there's an even greater incentive to put aside extra funds. Hopefully I won't need it. But if I do, then I'll be glad to have it.

4. Investing more in a down market

This year, I'm making more of an effort to stay on top of stock trends and invest during a down market. This worked out well for me during the pandemic, but I've slacked off in the last two years in favor of safer index funds. I'll be making more of an effort to stay on top of the stock market this year and take advantage of downturns.

In January, I bought some Tesla stock during the downturn, which has since rebounded and created a nice return for me. Hopefully there will be more opportunities like this in 2023 – when they appear, I'll be prepared to take advantage and trade some stocks.

5. Funding an 'anything goes' account

Sometimes you need to make a frivolous purchase, and that's OK. When you work hard and make responsible financial decisions most of the time, the occasional splurge is perfectly acceptable. I'm stricter with my budget this year than ever before, but that doesn't mean I deprive myself. I've set aside an "anything goes" account with $3,000, and it's exactly what it sounds like — funds that I can spend however I want.

Whether it's an upgraded iPhone, a designer bag, or (more likely) a vacation not booked with points, these funds are there for fun. By allowing myself a judgment-free splurge from money set aside for that purpose, I can stay on budget while still enjoying the fruits of my labor.