Budgeting: A Fresh Start for Your Finances in the New Year

January 15, 2024
Natalie Thorburn

Photo year 2024 budget plan concept allocation text budget 2024 with financial calculation icon on wooden cube blocks on white background with copy space new year budget planning and allocation bannerCredit: tete_escape via Freepik

Saving money, spending less, and paying down debt are some of the most common financial New Year’s resolutions. Whichever financial goal you choose, it’s easier to achieve when you have a budget.

Think of your budget as a game plan, telling you the best way to use your money. It reveals how you spend your money, so you can make more intentional and responsible choices with your cash.

That’s quite a big responsibility for the humble budget. To make sure yours is up to the task, check out these budgeting tips. They can help you build the best game plan for your New Year’s resolutions — whatever they may be.

Follow a Specific Budgeting Method

A budget can be a simple, back-of-the-envelope accounting of your cash flow. But this easy-breezy method may be too flexible for someone who hasn’t had a lot of experience budgeting.

If you’re new to budgeting, how do you know if your math is right? How much should you be spending on everything in your budget? Choosing a more specific budgeting method provides these answers.

The 50/30/20 budget is one of the most common options out there today. It splits your spending into three major categories (needs, wants, and savings) and assigns them a percentage of your paycheck (50%, 30%, and 20%, respectively).

You can always tweak the percentage breakdown to better reflect your unique needs and goals. However, they create a good starting point if you don’t know how much you should be spending in the first place.

Always Save, No Matter Your Resolution

Let’s say this year, you want to improve your credit score or pay down debt. Your budget should prioritize savings, even while you focus on these other financial goals.

Consider the balance in your saving account a personal key performance indicator — the more savings you have, the more successful you will be. After all, savings give you a cushion. If you have to pay for something unexpectedly, you can tap into these reserves while still paying down debt.

Of course, don’t beat yourself up if you can’t handle the unexpected without a little extra help. Most people can’t handle a $500 expense on their own, and the average person takes two years to save one month’s worth of living expenses.

In emergencies, you can research your options for same business day loans to provide a safety net. With nearly same day funding, some online loans offer a convenient way to cover the unexpected when your savings fall short.

Be Realistic with Your Spending

A successful budget strikes a balance between responsible spending and fun splurges. While the 50/30/20 method helps you find that balance, you have the hard task of deciding what fits within this budget’s three categories.

Be honest with yourself. Relying on takeout four times a week is financially unrealistic, but so is swearing you’ll never get takeout ever again.

Budgeting for the occasional splurge can create a stronger budget. This way, you can plan for the occasional trip out, so you won’t have to scramble to cover that surprise $32 on sushi when you finally cave.

Automate Where You Can

Automating fixed, regular bills simplifies budgeting. All you have to do is tell your bank when you want these transactions to happen, and you don’t have to worry about hitting the biggest bills in your budget. Your bank will send money to your creditors on time, every time, ensuring you never miss a bill.

The Takeaway:

The start of a new year is the perfect time to brush up on your budgeting skills. Keep these tips in mind, no matter what you plan to achieve in 2024. A balanced budget supports any financial resolution.

 

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