While each year, most people make a list of several resolutions, each year those resolutions often fall to the wayside after several weeks. But personal budgeting is a resolution you can't afford to break. Don't wait until January 1 to start your planning. Follow these tips to make budgeting a regular habit instead of a random practice.
Write it down: Checkbooks have ledgers where you can keep track of your money, don't reserve this action just for your checks. Track your spending so you can see where your money is going. You'd be surprised how five dollars here and five dollars there adds up. If you notice a pattern of unnecessary or wasteful spending, consider applying that money toward your financial goals, whether it's a car payment, mortgage or vacation fund. You may have to sacrifice a couple of dinners out but you'll pay down your largest sums of debt faster.
Pay Down Debt but Pay Yourself First: If you don't already have a retirement fund set up, do so as soon as possible, even if just 10 percent gets deducted from your paycheck. If your money is only going toward current bills and you're not saving for the future, you will find yourself in a financial predicament when you decide you want to wind down. Don't wait until you think you've put a major dent into your current debts before you start contributing to your future well-being. When money goes into your retirement fund, you can focus on using the remainder of your take-home pay to wisely manage your monthly payments and pay down debt.
Fill the Bucket: Have you thought about what you'll do should something unexpected occur? Car trouble, a hospital visit or emergency vet care can throw a wrench in your budgeting plans. Aim for setting aside approximately six months worth of living expenses as a safety net should a rainy day turn into a rainy few months. This will help you avoid increasing the balance on your credit cards that you are trying to eliminate.
By challenging yourself to follow these suggestions, you'll see money management as an important skill as you spend wisely and save sensibly in the new year and beyond.
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