As the end of 2019 draws near, it’s not too soon to develop an effective budget for the next calendar year. If you feel that you’ve been spending too much recently and would like to work on saving yourself some extra money, budgeting is a useful way of accomplishing that. Below we have highlighted some tips to help you create a personal budget for 2020. Spend smart and save some money this New Year!
1. Determine your Household Income (after taxes)
Whether you are married or single, it is important to start with recognizing your projected annual income. Headlining your budget with your projected income after taxes will give you the perfect starting point to developing a personal budget.
2. Outline your Fixed Expenses
Everyone has monthly or annual expenses that they need to account for. Fixed expenses range from mortgage payments to cell phone plans to car payments/insurance and much more! There are a number of fixed payments that clutter our expenses every year. Creating a budget will help you get a better overview of how much money will be going out each year and can assist you in making better decisions financially.
3. Set Goals
Now that you’re budgeting, you can begin to set goals of contributing more money to your savings account or paying off debts, such as student loans, earlier if possible. Setting these goals will give you something to strive towards and, ultimately, create better financial habits moving forward.
4. Utilize a Spreadsheet or Online Budgeting Tool
There are plenty of online budgeting tool options that can help you keep track of your spending and check to make sure you are on budget for the year. So if you need a little help with your budgeting we would encourage you to check out some of those options. However, if you are proficient in Microsoft Office and prefer to budget manually, simply creating an Excel Spreadsheet with all of your financial information can also be an effective way of tracking your progress.
5. Monitor your Budget Regularly
How often you monitor your budget planning is up to you, but it is recommended that you keep tabs on your budget at least once a month. Tracking your budget regularly can help you create better spending habits and will make sure that you are staying on the right path!
We hope that the tips listed above have helped you gain a better grasp on how to create an effective budget for 2020. While budgeting may not seem like the most fun practice, it can do wonders to maximize your bank account balance! And who knows, if you save a little money now, maybe you can even save up enough money for that dream vacation!