Budgeting Tips For the New Year

As we are closing out 2016 and planning for January 2017, here are a few tips to start the new year off right:

First, review the trends for the year in each budget category.  If you use www.Mint.com to budget and track transactions, they have a TRENDS tab that you can click on and it will show you in a very colorful wheel with total $$ spent and the percentage of your overall expenditures.  If you've been spending more than you thought in a particular area, you will want to make sure that you allocate appropriately in your future budgets.  

Second, before you even start budgeting for the new year, think about your financial goals.  Are there specific trips you want to take next year?  Will you need extra cash for a big birthday or anniversary celebration in the coming year?  Is your wardrobe in dire need of an overhaul?  These can be big ticket items that you will want to start saving and preparing for as part of your monthly budget expenses.  Create your specific goals and identify how you will save the money each month so you won't confuse it with your regular emergency or household savings.  You can easily create goals in your budgeting software or online banking and attach an account to it so you'll know if your on track as the months go by. 

Third, if you have irregular income like our household, now's the time to take the average of the past 12 months and use it to create a realistic budget.  It's always better to estimate on the lower end so you don't find yourself overspending.  Use the overage to put towards the next month.  Imagine how you will feel when you are 2 or 3 weeks ahead of bills!!  Whatever you do, resist the temptation to treat it like monopoly money and go on a spending spree.  

Finally, think more long term in your budgeting and go ahead and create budgets for each month of the next year!  You can do this on Excel or on a site like www.EveryDollar.com.  When you go through the process of looking at each month, it forces you to think about things like weekend trips, visits to family, summer breaks, kid's activities, school clothes and supplies, birthdays of loved ones, anniversaries, and specific holiday activities.   It's fun to look back at what you did, determine what you'd like a repeat on, and decide what you would like to do differently.  Time to channel your inner-nerd and spend some time crunching some numbers for the coming year. 

If this overwhelms you, you may want to consider a little help.  I'd love to sit down with you and guide you through this process.  Give me call at (615) 856-5842 or email me at dawn@nameyourcash.com .  HAPPY NEW FINANCIAL YEAR!!!! 
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