Many people look at the New Year as an opportunity to evaluate priorities, make changes in their life, and plan for next year. A common goal is getting finances in order. If budgeting for 2013 is on your to-do list, we’ve compiled a list of tips for you.
No one enjoys budgeting, but it’s an integral part of securing a successful financial future. A budget can help you pay off your debts, save for the future, and even help you set money aside for all the fun things you want to do. Sticking to a budget isn’t always easy but if you plan thoroughly it will make it that much easier to stick to the budget and reach your goals.
We’ve compiled some tips for making – and sticking to – a successful budget for 2013.
Calculate all of your income and all of your expenses. Be brutally honest with yourself – account for every meal you eat out, all the shopping you plan to do, etc. If you act like the daily coffee from Starbucks “doesn’t count,” you’re going to be missing a large chunk of your expenses. If your expenses exceed your income, you know it’s time to make significant changes to your spending habits.
Treat Savings Like a Bill Payment
Like paying your mortgage or electricity bill every month, you should prioritize savings the same way. If you work savings into your budget and commit to “paying yourself” each month, it will become a habit and you won’t even notice the money is gone.
Identify Wants and Needs
It’s easy for us to think of things that we don’t actually need to survive – upgraded cell phones, new televisions, new clothes, etc. – as needs instead of wants. If you’re budgeting because you have trouble saving money or are unable to pay your bills, identifying needs and wants is vital to your ability to cut back on spending.
Monitor Your Spending
You should keep track of everything you spend, from the bills you to pay to a $1 pack of gum. This is a good practice at least for the first few months of your budget. This way you will be able to see exactly where your money is going and where you can cut back.