The start of a new year is the perfect time to take control of your finances and get them in order. If you’ve been meaning to get organized and make better financial decisions, we listed 5 budgeting tips below to help you reach your financial goals.
Create a spreadsheet
It helps to see where all your money’s going when everything is laid out before you. Create a spreadsheet and list your income along with all your expenses. This list should include all financial obligations such as your: monthly rent or mortgage, loan repayments, subscription services, utility bills, insurance premiums, transportation fees, and more.
Set a realistic budget
Once you’ve listed everything out, it’s time to create a personal budget. Make sure to prioritize any monthly expenses, retirement accounts and savings, then make allocations for food, groceries, and any other personal supplies. The goal should be to pay off your debts and maximize your savings, however try to set a realistic budget that doesn’t feel overly restrictive – allow for any surprises and factor in fun things such as entertainment, shopping, travel, eating out, etc.
Review monthly subscriptions
Monthly subscription service fees may seem small at first, but they can seriously add up when you total the amount for an entire year. Review all your subscriptions and pause or cancel any services you no longer need. This can include: fitness memberships, streaming music and video services, subscription boxes, delivery services, and more.
Start an emergency fund
If you haven’t already set up an emergency fund, there’s no time like the present. An emergency fund is a safety net that can cover any unexpected moments such as: the loss of a job, expensive car or household repairs, medical bills, and other emergencies. Financial experts recommend saving anywhere from three to six months worth of your basic living expenses in your emergency fund.
Cut back on unnecessary spending
Try to be more mindful of your buying decisions and avoid making impulse purchases. If you’re thinking of making any considerable purchases, delay it and ask yourself if it’s really necessary and if your budget could allow for it. Reducing unnecessary spending could also mean brewing your own daily coffee at home, limiting dining out and takeout food, and cutting back on alcohol.