It’s (almost) a new year! And we all know what that means. It’s time for a new budget. *cue groans*
What if You Don’t Have a Budget?
If you have never created a budget, you will need to start from scratch. Our library has several articles and documents to help get you started. The basic steps are as follows:
The new year is the perfect time to tackle your budget revisions for two reasons. First, you are most likely already thinking about money due to holiday and end of year expenses. Second, the new year is traditionally a time of new beginnings. As such, we are already pre-conditioned to attempt new things.
Here are three tips to help you in your steps to a revised budget for 2020.
1. Update Your Financial Goals
Did you reach your financial goal for 2019? Maybe you paid off that big debt or built up your emergency fund to a 3-to-6-month buffer. Congratulations! Now is the time to set your next goal.
If you are still working toward your 2019 goal, no worries, many financial milestones take a while to accomplish. Keep working toward that big accomplishment, but remember to break it up and celebrate along the way!
No matter whether you are striving for a new goal or chipping away at a current plan, be sure to write down your final target at the top of your budget plan.
2. What to Expect in the Coming Year?
You know better than anyone what you expect to happen in the next year. Do you plan to move? Are you thinking about changing positions? Do you expect a raise or a bonus? Are you having a child?
These are all considerations you should take into account when determining both your goal as well as how you will be spending your money over the next year. If you need to make money you make in the first few months stretch to cover an anticipated employment gap, planning ahead will save a lot of headaches.
3. What Worked in 2019?
Perhaps the most important item to review is how your 2019 budget worked for you and your household. Focus on your pillars first:
Were you consistently over or under spending on any of these items? Consider adjusting your current allocations to be sure you are sufficiently covered in those areas. Review other areas where you either came in under- or over- budget. This will help you better adjust your budget for the coming year.
With these tips in mind, it’s time to tackle that money plan! It might not be the most entertaining way to ring in the New Year. But it is undoubtedly the exercise to bring you the most peace of mind.