Budgeting for the New Year
Monday, December 19, 2022
Many people start the new year off with resolutions. Whether the goals are personal or intended to take a business endeavor to the next level, the new year brings the opportunity to start fresh and get back on track with your finances.
Take a moment to figure out what your financial resolutions and overall goals are in 2023. What do you specifically want to do with your income? As you start making specific goals for the new year, consider any outdated goals or ones you might have already achieved. Also think about any recent life changes that may influence the types of financial goals you set next year.
Review Expenses
Three main categories make a budget. Fixed expenses typically stay the same each month, variable expenses change from monthly and periodic expenses happen once or a few times each year. To properly allocate your income, it is necessary to understand each expense and spending habits. For example, grocery receipts are a variable expense that fluctuate with soaring inflation prices. But with exploring options and reviewing your spending, you might find opportunities to save.
Reconsider Subscriptions
Without a doubt, monthly subscriptions can add up. When reviewing subscriptions, consider recurring service. Are you a subscriber to multiple streaming or food delivery services? Do you pay for several subscription boxes? It is possible you are paying for services you don’t actively utilize. Is there a news source you subscribe to but don’t actively read? After considering your subscriptions, you might cancel them to save some extra money or be able to find a cheaper alternative.
Keep Saving
Continue to set aside a percentage of your income toward your savings. If possible, save from each paycheck and gradually increase the amount once you feel comfortable doing so. One option is to arrange for an automatic withdrawal from your checking account to a savings account. Automating keeps you from questioning whether you should put some money into savings because it is already there.
Reevaluate Budgeting Tools
If you are a few years into budgeting, you might be ready to reevaluate the type of tracking tool you use to budget. Finding the right budgeting tool for your finances and lifestyle is important to reach your financial goals. Consider organizing your finances with a notebook or spreadsheet. To simplify the overall budgeting process, consider using a budgeting app.