HELP! Just got a 2023 iMac but I messed up and only got 256gb hard drive space. How can I increase hard drive space...can I slip another hard drive in the iMac?

What you can do with a smaller internal drive, is run macOS and your App's on the internal drive, then move and access your Photos, Music and/or iMovie Libraries on an external drive.

Move your Photos library to save space on your Mac - Apple Support

Change where your music files are stored on Mac - Apple Support

Move your iMovie for Mac library - Apple Support

Another option if you purchased the iMac directly from Apple or an AASP, is to return that iMac with-in the 14 day return period and order an iMac with a larger internal drive.

for the return policy see > Apple - Legal - Sales Policies - U.S. Retail Sales

to order an iMac with a larger drive see > Buy iMac - Apple

There is no way to increase storage or RAM on a new 2023 Mac; everything is built in at the factory. You may be able to return it for refund (within 14 days if purchased directly from Apple; other vendors may have different return policies). Then purchse another Mac with more storage.

Or you could get an external drive for more storage space. In that case, I suggest you reserve the internal (built-in) drive for macOS & apps. Put all your user data on the external.

That iMac has a fast solid-state drive (SSD) – not a slower mechanical hard drive. I could be mistaken, but I believe the internal SSD is soldered onto the motherboard, and there is no way to upgrade it after purchase. There isn't any place to slip another drive of any kind (HDD or SSD) inside the iMac.

You can add external drives. Your 24" M3 iMac has two Thunderbolt / USB 4 ports with USB-C connectors. These support USB 3.1 Gen 2 (up to 10 Gb/s), Thunderbolt 3 (up to 40 Gb/s), and USB4 (up to 40 Gb/s). That means that you can use them to plug in just about any external HDD or SSD on the market.

If you have a 24" M3 iMac that has the two additional USB-C (USB 3) ports, that would give you more places to plug in external USB HDDs and SSDs.

You can use an external drive. I doubt you can get the internal drive upgraded. That hasn't really been possible with Macs for the past decade or so.

I have started using internal drives for things such as apps and items I want to load quickly. Data I keep on external drives. Access time is still pretty fast with newer faster connections.

Apps are kept on the internal drive, along with the operating system. Though as I said before, with the new high-speed interfaces it probably wouldn't make much difference.

You keep your entire "Home" folder on the internal drive so you're not messing with your Library folder being on an external drive (though theoretically that would be possible too). Just put your data stuff on the external drive. For some things you can use aliases to direct files there. I am not running a newer OS so I don't know if symbolic links work the same way anymore.

For me, photos and A/V media are the big space hogs. I keep those on other drives.

This is just the way things have to be done with new computers. Flash storage is fast but not particularly cheap, so most people have smaller internal drives. I guess in theory we would all subscribe to large amounts of iCloud storage and Apple Music, but I make do with the 5 GB free. In fact if you read the fine print even Apple says to make sure you back up your files on local storage.

You can return it no questions asked within the return window. Do it.