Budgeting Tips to Follow in the New Year

Did you make a financial new year’s resolution this year? The new year is a perfect time to start making smarter decisions with your money. Whether it’s saving money for retirement, paying off debt or building your bank account, the blank slate of a new year is the perfect motivation to get back on budget.

5 Tips for How to Budget Your Money

Setting goals for your personal finances can be overwhelming. There are a variety of expenses that are hard to plan for and it is easy to sometimes want to throw in the towel. But if you start the year off strong, stay committed and disciplined, you can work towards achieving your goals one day at a time.

1. Set Attainable Goals – It is probably not realistic to think by the end of one year you will have a million dollars or be completely debt-free. In an effort to not get discouraged along the way it’s important to set goals that are challenging, but attainable.
2. Use Last Year as Your Guide – Make a spreadsheet or list of expenses for each month of last year. Make note of which months had the highest expenses or things you didn’t plan for financially. Try to determine patterns that can help you plan more carefully for the year ahead.
3. Set a Monthly Budget –It’s easy to account for expenses you can count on month after month, like your phone bill, housing and groceries, but what is critical is to build in money for things like unexpected doctor appointments, car inspections or new clothes. You can always consult with a financial coach to help you establish a good monthly budget.
4. Set Up Different Bank Accounts – Everyone should have a rainy-day fund. This is designed to help manage the financial stress of an unplanned event. It’s best to start with $1000 but overtime you should work to have 3-6 months of take-home salary ready for when disaster strikes. It is also useful to have different accounts set up for long-term goals. It ensures you don’t touch certain amounts of money and that you can watch your bank account grow over time based on your contributions.
5. Strive for Multiple Income Sources – While this isn’t always possible, if you can manage to have multiple revenue streams at once, saving becomes much easier. So, if you can turn a hobby into a side-job that you work on during nights and weekends, go for it!

Every new year is a chance to change your mindset. Financial freedom is possible with just a few adjustments to your everyday spending habits. Make this year yours by following these budgeting tips and start working towards your goals.

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