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Financial Literacy - Feature Article

Holiday budgeting tips on StageofLife.com

Top 5 Tips for a Budgeting in the New Year

by Lauren Podolsky, StageofLife.com Financial Wellness & Literacy Editor

Tis’ the season for a fresh start, a new beginning, and a time to set a list of goals and visions for the New Year ahead.  While most people are contemplating their desires to live healthier, happier and more fulfilled, I find the best resolutions are the ones that are made with clear purpose and attainable notions.  

The start of a New Year is the ideal time to think about putting together that budget you’ve been dreaming about.  Whether you’ve attempted in the past and failed, or already created a plan but feel as though it needs a little revamping, January 1st is right around the corner, and going into the New Year with an aspiration to be financially independent is one declaration we can all agree on.

Here are a few tips to get you started and well on your way to a healthy budget in the New Year:

1.  Know Why You Are Budgeting And Set Clear Goals

If you are attempting to cut back on your spending and devoted to invest more, you need to be clear about why you are doing it.  Nothing worthwhile comes without motivation, so make sure you have a precise goal in mind before tackling a new budget.  Is your goal to budget for a big-ticket item?  Maybe you simply want to pay off debt or build a bigger savings fund. Whatever you are trying to achieve in being more financially responsible, it is important to keep this goal clear in your mind to keep your saving and budgeting on track.

2. Be Realistic

This comes with any goal, but aspiring to accomplish things beyond our means is not an effective approach in goal setting.  Why?  When we set out to fulfill a desire that is literally impossible at some point in our lives, we only get discouraged with failure.  That being said, don’t sell yourself short; simply set financial goals that are reasonable to your particular lifestyle.  Just because you need to save an extra $200 a month, doesn’t mean you should cut out the necessary expenses like food or shelter in order to do it.  

3. Budget For Your Expenses First

One third of your income should go to paying your bills.  This includes rent, or mortgage, car loans, personal loans, and all of the bills that keep you functioning.  If all of your bills combine add up to more than one third of your income, start to consider ways to cut back on other expenses that are not included in this category.

4. Budget For Your Future Second

Budget to save!  This is often the hardest one because we don’t see the effects right away, but it is just as important as paying our bills on time.  Just as one third of your wages should be distributed towards expenses, one third of your wages should also go into a savings account.  While most people think of their savings account as a last resort, it really should be the primary safety net source in your finances.  Don’t just think of saving for larger-than-life items, but keep in mind, saving for emergencies is imperative!

5. Budget For Yourself Last

As much as we think our income is enough to cover the necessities, there will always be expenses that come up that are more for pleasure than purpose.  It’s important to keep this in mind when preparing your budget.  As long as one third of your income can cover your bills, you should set aside some of that money for things like going out to dinner, buying new clothes, or taking small trips.  Budgeting for ourselves is important because as they say, we want what we can’t have.  If we don’t allow ourselves a few splurges every now and then, it will only make us crave spending more!

Now that you have a clear understanding of why you want to budget, it’s time to put those wants into practice.  It’s never too late to plan for a stable and secure financial future.  So head into the New Year confident, secure, and ready to take control of your financial life!

If you have other tips we should add to this list, or any questions or comments, please Contact Us

Read more Financial Literacy articles from StageofLife.com


Lauren Podolsky - StageofLife.com Financial LiteracyAbout Lauren Podolsky: With over 10 years as a blogger and Financial Literacy adviser, Lauren lends her money tips and financial Q&A insights here on Stage of Life each and every month. For more healthy tips, recipes and advice, check out Lauren's personal site at www.saywhatyouneedtosayblog.com where she shares her love of food, staying fit and living a healthy and balanced life.

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