Each new year brings with it fresh opportunities to make a positive change. After all, there’s no better time to get your finances in order than January. Christmas has been and gone, meaning it’s time to think about how you can budget over the next 12 months. Admittedly, it’s not always going to be easy to get your money in order – and sometimes you’ve just got to make a plan. With this in mind, here are four tips to help you budget your year.
Essentials Versus Luxuries
It’s important that you have a firm understanding of what counts as an essential and what falls into the category of a luxury. Essentials are things that you can live without, such as food, clothing and accommodation. Meanwhile, luxuries are purchases that could be deemed unnecessary, such as fancy meals out or the newest technology. If you can make a list of what essentials you need and only spend money on those items, you should find it much easier to stick to a budget.
It’s important that you think ahead to key dates where you may have to spend money. This includes birthdays, holidays and, of course, Christmas. Don’t let these events just crop up on you all of a sudden. Instead, plan for them in advance if you don’t want them to rock your budget.
As mentioned, you’re best off starting a plan of action as soon as possible in the year. However, you should constantly re-assess your financial situation on a month-by-month basis. Your budget should represent a whole manner of changes that could occur, including bonuses from work and unforeseen windfalls. Sadly, there may be negative changes to consider as well, such as illness making you miss work.
It’s possible to spend beyond your budget if you pay using debit and credit cards. Meanwhile, if you use cash, your finances are easier to keep track of when you’re out and about.