A lot of us try to begin each year with some solid financial goals. Some spend hours planning out the “perfect” budget and others resolve to count every single penny. For a while, everything may go to plan, but then life happens. A lot can happen in a year. Our clearly defined goals may seem further away than before and our budget might be in desperate need of repair.
Luckily, a brand-new year has arrived and with it comes renewed hope and optimism. Now is the time to look forward to the future. Now is the time to re-envision your goals, review your pesky finances, and grab your wild budget by the horns.
Take a look at these five tips to help you get your budget under control and keep it working for you throughout 2019. It will take some patience and hard work, but you can become the boss of your own budget.
Predict Your 2019 Budget
So how do you plan a rock-solid budget for 2019? Well, you just have to predict the future. Don’t worry, it’s not as hard as it sounds—and no crystal ball is required.
You can predict your 2019 expenses and assets by looking over your cash flow for last year. Go over your bank account, transaction history, and credit card statements in detail to find out where all your money went last year. This will be a lot of work, but manually tracking your spending will help you closely study your own money habits or discover some unnecessary expenses.
There are some great budgeting tools that can help speed this process up like Mint and PearBudget. You can also check out the tools your bank and credit card issuers provide.
Learn more about budgeting software options.
Next, you need to consider what new expenses might come up this year and add them to your budget. And don’t forget about special events like birthdays, anniversaries, holidays, and weddings. Over the year, they can quickly add up.
By now you should be able to see where your money will likely go throughout the year and make any adjustments you need. You might discover that if you cut costs here and there, you’ll have more money to put into your vacation fund. It’s all up to you.
Make It a Team Effort
If you’re married or have a significant other, it’s important to talk to your partner about financial issues and goals. This includes planning out your budget together.
Money may not be the most exciting topic of conversation. So try to make it fun! Have a monthly date night where you buy your favorite snacks, turn up some tunes, and talk over that month’s budget. The goal here is to make sure you’re both on the same page. Talk to each other about long-term goals and individual needs. And take plenty of time to listen to your partner to understand what is important to them. You may need to work out a compromise. The important thing is that you’re working as a team.
If you’re single, you can still make your budget a team effort. Find a friend or family member who can act as your accountability partner. They can sit down and help you write out your budget and also help you say “no” when you’re tempted to spend more than you should. Have set times when your accountability partner contacts you to ask how well you are following your budget.
Get Your Debt Under Control
If you have debt, paying it off needs to be a top priority. Managing your budget is going to be nearly impossible if your debt is out of control.
Your first step is to find out how much debt you actually have. This might be the toughest step to take. A lot of people feel guilty or scared about the amount of money they owe. But burying your head in the sand won’t do you any good. Muster your courage and write out exactly what you owe and to whom.
Now you can decide what to pay off first. Once you do, pay more than the minimum payments and stick with it. Eliminate temptations by cutting up your credit cards and stop eating out as much. Avoid expensive hobbies and if you have kids, be open with them that you’re on a strict budget.
Escaping debt is no easy task—we’ve only scratched the surface here. Learn more about how you can become debt free or check out the fantastic debt snowball method. Learn more about how you can become debt free or check out the fantastic debt snowball method.
Use the Cash-and-Envelope System
If you’re finding it particularly difficult to follow your budget, then the cash-and-envelope system might be what you need.
With this system, you use cash for the different categories of your budget and tuck it into labeled envelopes. If you want to see how much money you have left in a specific category, all you need to do is take a look in that envelope.
It might be best to use this system for expenses that frequently break your budget. Items like groceries, gas, eating out, entertainment, and clothing.
And you absolutely cannot take money out of an envelope to spend on something outside of its category. Money in your groceries envelope can only be spent on groceries and not on eating out. And when that money is gone, it’s gone for the month. So plan wisely and pillage the pantry to avoid any unnecessary trips to the grocery store.
Learn more about whether the cash-and-envelope system will work for you.
Be Patient with Yourself and Others
Last, but certainly not least, don’t beat yourself up when you fall short. And if you have a budget partner, be patient with them as well.
Creating new habits is seriously hard work.
It might take a few months to adjust to your new budget. So don’t expect to be perfect right away. You might even need to re-plan your budget a few months into the year. Life has a funny way of ignoring our carefully thought-out plans. But keep trying and you’ll get to where you want to go.
With a new year comes new opportunity. Now is a great time to get your budget under control. If you control your budget, you’ll control your future.