Budgeting for the New Year
Budgeting can make all the difference when making your plans at the beginning of the year.
The start of a new year is the perfect time to gather your reflections from the previous year and set resolutions that you would like to achieve throughout this year. Among some of the most common New Year’s resolutions, like exercising or getting organized, is budgeting. This is not an isolated incident either. Every year, more and more people are opting to set financial goals as new years resolutions. While the idea and intent might be nice, it’s the execution of the idea that’s often difficult. Budgeting can help with a number of things. Setting up a budget at the start of the year can help you plan for any major purchase you might want to make, manage your regular expenses, and prepare you for any unfortunate events that could come up.
Budgeting for Everything
When you start your budgeting process, you’ll want to make sure that you cover all of your bases. Pull your bills and transaction records from a previous month or two and use those to figure out just how much you have to spend. Set a zero-based budget, or one where each dollar is given something to be spent on. The idea behind a zero-based budget is that you always know where you’re spending your money each month. Whether it’s bills, loans, or something fun, you will know how much you need to set aside for each category. This not only allows you to have your fixed monthly costs covered, but it gives a new perspective to your entire paycheck. Many people receive their paychecks and automatically think of what they can spend it on. When you take out the fixed monthly costs, that number is reduced substantially. The reduces the risk of overspending on unnecessary things.
Prioritize Your Budgeting
When figuring out a budget, it is essential to prioritize the items that are necessities. Go through your expenses and determine if they are things you need or want. All of your “needs” should be placed higher on the budget. Your “needs” list will often include your bills, loans, home maintenance, and other products, or services you require.
Once you have budgeted for your needs, you can start to consider the things you want. If you have extra money leftover at the end, you can choose what you spend it on. Whether you decide to buy something you’ve had your eye on or put it away for a rainy day is entirely up to you. Prioritizing your budget this way can give you peace of mind every month, and keeps you and your bills in check.
Be Open to Budget Cuts
This may be one of the more difficult things to do, but it helps in the long run. It often happens that we run into reason to introduce cuts to our regular budgets. If money is tight right now, you can cut things out that aren’t necessities. Canceling your cable or other media subscriptions or cutting back on the amount of dining out you do are good ways to save a little money each month. Often, people think “Well it’s only five dollars for streaming music, 12 for video, and 20 for my gaming subscription. I’ll just save more next month.” While those costs may be small, they snowball once they pile up. Three video streaming services, one for music, and one for gaming could end up at well over 60$ a month! That could be two week’s of groceries for one person. Food will also be something to budget for, but there is flexibility in how much you need to spend. Shopping at discount grocery stores or buying items that aren’t a name brand will still allow you to buy your items but still while saving money.
Look into Financing Options
Many companies offer options to finance your purchases. Most will advertise if they offer financing options or specials. Take some time to browse their website or sign-up for their newsletters, and you could find even more ways to help you save money throughout the year.
At Mason Pro Services, we offer several financing options to help you pay for your heating, cooling, and plumbing needs. You probably weren’t budgeting for repairs, but that shouldn’t set you back. Contact us today to discuss your needs and how we can help you finance them.