create budget for the new year

29 Nov

How to Create a Budget for the New Year

Following the holiday season, it can feel intimidating thinking about getting back to your budget after a season of spending (and sometimes overspending!). But the new year is the perfect time to develop new financial habits and create a budget for the new year!

How to Create a Budget for the New Year

  • Create 2-3 Goals

Create multiple financial goals that are “SMART” – specific, measurable, attainable, realistic and time-bound. Example: I want to pay $500 off my credit card by the end of September 2018.

This goal is specific and measurable – you know exactly how much you want to pay off your credit card. Depending on your budget, this goal is attainable and realistic. It’s also time-bound – you’re hoping to complete it by the end of September 2018.

Write down 2-3 goals for yourself in a notebook, and be sure to include specific and realistic details and dates!

  • Make a List

The next step to create a budget for your new year is to look back through your income, expenses and spending habits for the previous year. Make a list of habits you can change and areas you’d like to improve.

  • Tell Your Money Where It Goes

Make a list of your monthly income, expenses and spending categories (areas you don’t necessarily have a bill for, but you spend money on regularly). Categories can include groceries, gas, utilities, clothing, eating out, savings, debt payment etc.

Give each category a budgeted amount that adds up to your total income. This way, you’re giving every single incoming dollar a job to do!

  • Keep Track

Keep track of income and expenses to keep an eye on where all your money is coming from and going. You can find multiple spreadsheet templates here, or you can download budgeting apps like EveryDollar, Mint or You Need a Budget.