The beginning of a new year is a great time to review and update your finances. It’s a good idea to review your budget from time to time to be sure that it still applies to your current situation. Try to be sure where each and every dollar is going each month to be as accurate as you can be. If you know how much you’re spending and when, you’ll have a better idea of how flexible you can be with your spending habits. Check out a few of these tips to consider when re-evaluating your budget for the month…
1. Have there been any major changes? Is your income the same as it was at this time last year or has it fluctuated? Have any of your monthly payments decreased or increased? Make sure you’re starting out with accurate numbers in order to help prioritize your monthly payments and spending.
2. Are you saving enough? Do you have any big plans coming up this year? Maybe you’re planning on buying a house, or starting a family, or maybe you just need new tires for your car. If your current saving habits still fit the bill, that’s great news! If not, examine some of your spending in other categories to see if you could pull money aside from your other payments. They don’t have to be large cuts, as any little bit will help. Don’t forget to continue adding to your emergency cushion, and make sure you’re contributing enough to your retirement plan.
3. Are you spending more than necessary? I like to start the year by reviewing all of my bills and eliminating or cutting back where I can. This particularly applies to my cable and internet bill, which always seems to creep up by $30 every year. A call to my provider usually does the trick, and I’ve always been able to get back to my original rate. I also try to get rid of things that seemed like ok ideas at the time, but I really don’t need to continue paying for, such as streaming internet radio (sorry, SiriusXM) or extra gym memberships (yes, I had one at two different gyms). This is a great way to find extra money to contribute to paying down your debt or adding to your savings.
4. What are you forgetting? The more specific I make my monthly budget, the more I realize there are a lot of things that I tend to leave out. Yes, I leave enough money for gas and car payments, but I tend to forget about my yearly inspection and the cost of new tires, and I only recently put into place a plan to set aside cash for oil changes and tire rotations. There are a bunch of smaller things like this in any situation, things that you might only need to pay for every few months or once or twice per year. If you divide up that total cost and set just a little aside every month, those larger but necessary purchases won’t feel so draining on your wallet.
What changes will you be making to your budget this year? Are you able to stick with what you’ve planned? Share your tips with us!
