New Decade Resolution (Budget)

The beginning of a new year marks the time to make resolutions for the coming year.   Eat healthier, exercise more, and pay down your debt – all worthy resolutions. The beginning of a new decade may prompt you to make bigger resolutions that hopefully you stick to for more than a couple of weeks.

If you struggled in 2019 with your finances and have no idea where your money goes on a monthly basis, make your 2020 decade resolution to BUDGET.   Once you get started – it won’t be that difficult to keep this resolution for the entire decade.

Budgeting Steps

Step 1 – Keep track of every penny you spend for at least a month. Fixed monthly expenses like rent and insurance are easy to record as they stay the same every month. It is the fluctuating expenses like food and gas that most people have no idea how much they spend every month. If you are picking up a coffee or lottery ticket each time you fill your car with gas – keep a tally of those amounts as well. You may be surprised how much these amounts add up to on a monthly basis.

Step 2 – Record when and how much you receive from income sources on a monthly basis. If you get paid bi-weekly, you will receive an extra paycheque twice a year. You want to account for those extra funds to make sure the “bonus” money doesn’t just disappear. Pay an annual expense, like a license renewal or a membership fee from the extra pay cheque.

Step 3 – Once you know what your monthly income is and how much you are spending – set a budget as to how much you want to spend on each expense. If your tracking resulted in monthly grocery expenses of $500 for a single person, you may decide that $350 is a more realistic number to budget which results in $80.76 per week. Start looking at flyers for sales to assist you in reaching your goal to reduce this expense. Don’t be too drastic with your adjustments in budgeted expenses from actual or you will set yourself up to fail.   The purpose of the budget is to make sure you are not spending more than you are making.

Step 4 – continue to track your monthly expenses, compare to your budgeted amounts and make any adjustments necessary. You may have missed an annual expense that you will have to work into your monthly budget to make sure the funds are available next year.

Whether you use old fashioned pen and paper to prepare your budget, an excel spreadsheet, or an on-line application – make 2020 the year you are in control of where your money is being spent.