Creating A Budget For The New Year

Do you want to start of the year with a great plan for your money, one that helps you meet your goals and dreams financially? Have you ever wondered ‘how do I make a budget for the New Year?’

It’s not that difficult, creating a budget the process is simple and it will make you think deeper about the money you have.

It might scare you, perhaps send shivers down your spine, but seriously, it is not as bad as you might first think.

Let’s take it slowly, and eventually making your budget will become second nature.

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Why Create A Budget

Your money needs to be told what it needs to do.

Be firm with what bills need paying and what money you have for the essentials.

It means that you will have control of your money and not your money having control of you.

Starting the year off with a great plan of spending less money and making any money that you do have work harder for you will help you look at your money in a new way.

How To Record Your Budget

How to create a budget is simple, but first, you have to decide if you are going to try a paper budget or use something like a spreadsheet to create your budget.

It depends on how you work and how you want to create your budget, this really is a personal choice.

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There are so many different options that you can try and it’s OK to try out more than one option to see what suits your needs best.

• Pen, paper and calculator
• Budgeting notebooks
• Spreadsheet
• Computer program

The choice is yours and it’s going to take time to find the right solution at this moment.

But remember it doesn’t have to stay the same way forever, it’s your budget you can change how you record it.

Create A Goal For Your Money

I’m not creating a budget for the entire year, it’s about creating your first budget of the year and thinking about your dreams and ideas for what you would like your money to do by the end of the year.

It will help you have that one big picture for your money and then it’s easier to work backwards filling in the details of how you are going to get there.

However, any goals or desires you do have with regard to your budget need to be measurable, achievable, and realistic.

Only then will it be easy to break these goals down into the smaller chunks that are manageable.

Money Saving Ideas For The New Year

If you are thinking about saving money, there are so many ways in which you can start and it will make a difference in what money you have available to spend.

• Cutting back on groceries
• Checking your statements to make sure you aren’t paying for some subscription or bill that you no longer use or need
• Think about selling some of the items in your home that you no longer need or want
• Cut back on how much you spend on fuel for your car
• Grow your own food, or as much as you can to save on buying these items
• Cut back on take-out food
• Buy shop brand products instead of the more expensive named brands
• Buy a book on budgeting, you can’t go wrong with Dave Ramsey
• Having a planner that helps you organize your budget too

Creating A Budget

This is perhaps the simplest part of the whole process, bringing all the information together to create your budget and work out what money you have.

• Gather your information, bills, debts etc
• Work out how much money you have to pay your bills
• What other expenses do you have?

If you need more information on pulling together a simple budget then check out, It’s Easy To Make A Budget.

Don’t Forget Your Emergency Account

When it comes to thinking about your budget it’s so important to remember to create an emergency account.

This is a savings account that you can dip into when an emergency arrives, but, that doesn’t mean when you fancy a take-out, just real emergencies that you haven’t budgeted for.

Simple Budgeting Tips For An Annual Budget

Bringing all your bills together and analyze them in such a way that you can account for every penny is something that I like to do.

I find it fun.

I want to make sure that I’m only paying for the things that I want to and not any errors on the company’s part, and yes that can happen.

Also, a good tip is to make sure you are sure that you have no charges for any item that you have not used.

Creating Your Annual Budget

Once you are fully aware of the money that you spend each year on your bills in all categories, including any car repairs or house repairs that might occur, then you have an annual figure of the expenses.

It gives you an overall look at the total costs for the year, you can budget for these items by adding on 5% and dividing by 12.

I like to add on 5% because costs always go up and never down, if you have money left at the end of the year then that is a bonus that you didn’t expect.

Don’t forget to include consumable expenses like food as well as any debt and utilities that you incur during the year.

If you plan to go on holiday during the year don’t forget to have a category for this, too.

Income For The Year

It’s not easy to do this one as often, you have to earn the money and this could vary depending on a number of different factors, however, getting your best guess is going to give you an idea of your income and work in your favour in this process.

Know the money that you have coming into the home, the wages that you earn and any benefits that you might receive is a starting point.

If you look at the annual figure, it gives you a great vision of your whole accounts over the course of the year.

It can help you determine the potential that your income actually has and the amount that you actually spend.

Having a visual that you can turn to during the year is important, you can use it to help create your monthly budget.

But remember your budget isn’t set in stone, in can change and this is OK.

Learning To Budget

If you know how much money you spend annually on different bills it can help to ensure that you are putting enough money away each month to cover these expenses.

This means that you don’t end up with bills that you can’t afford and have to turn to credit to pay for items you need.

Learning to create a budget is the easy part, sticking to the budget takes will-power and commitment.

There will be times that you fail, there will be times that you just want to cry and throw your budget into the sea, but it’s about picking it back up and ploughing forward that counts.

How To Cut Expenses

Sometimes we need money, more than what we budgeted for and this isn’t easy if you allocate every penny of your budget.

The areas that have the most wiggle room for adjusting your budget are the expenses that are incidentals like groceries and treats that you might have hoped for, while this is difficult to manage when you have to reduce the amount of food you can buy or treats you can have, living within your means is important.

It gives you the freedom not to be trapped by paying back debt along with any interest that gets added on.

Let’s Recap…

Creating a budget that reflects the money you have and the expenses will allow you to live within your means.

By doing an annual budget it gives you the bigger picture of the money you spend in the year and can shock you into taking action.

A budget is something that you will need to work on and at all through the year, there will be ups and downs, but this is part of budgeting.

You’ve got this.

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