Today we have a guest post from Sarah, the creator behind Businesswomenthrive.com. Her mission is to help women start and run successful online businesses. So I thought she would be the perfect person to teach us about setting up a budget for the new year. Find out more at her site and don’t forget to give her a follow on Instagram, Facebook, and Twitter.
Creating New Year’s resolutions is a tradition that is popular for many people. And with the New Year coming soon, people are creating resolutions such as weight loss, better eating habits and saving money/budgeting.
If your goal for the New Year is to save more money and start a budget, here is a quick and easy guide for how to get started!
- Determine how much money you make
For some people who have a steady schedule, this may be easy to figure out. But if you are self-employed, work and unpredictable job (such as a job for tips) or work for commission, this may be harder to calculate.
Try to work out an average from your last month or two of paychecks.
- Determine your “essential” expenses
Some of these expenses will be a set amount, such as your rent or car payment. This will be easy to keep track of. Other expenses that are variables will be harder to track, but it can be done.
Take a look at the last month or two of bank statements. See what an average month looks like for things like gas for your car, groceries and other expenses. Try to get a good idea of the total amount you spend a month.
- Track your “personal” spending
What I mean by this is, there are some things you buy that are essential, like gas and groceries. But sometimes you buy more “trivial” items like a pair of shoes or new clothes.
Check out how much money you are spending on items that you don’t really need.
- Create your budget
Now that you know what all your numbers are, it’s time to create your budget! I have a more in-depth guide on how to do that here. But, for the most part, here’s what you’ll do.
-Decide why you want to budget
-Track your spending
-Budget for irregular expenses
-Add up your income -Decide on your personal financial goals -Break down your goals -Begin writing the budget!
- Track your spending
Once you’ve created a budget, it’s time to track your spending and make sure you stay on track! There is a number of ways you can do this.
-Keep all receipts and record in an excel sheet/notebook
-Check your bank statements at the end of the month
-Use an app like Mint
While the first two options are effective, they are flawed. You can lose receipts or forget to ask for one. Also, who wants to keep track of all that paper?! Or, if you go through your bank statements you can forget what a transaction might have been if it comes through with a weird name. The best option is to use an app like Mint to track your spending. I wrote an entire post on it here. The way the app works is you just connect your bank account, credit cards, and other debts and it tracks your spending for you! You can set a budget, set reminders for bills and more! I know some people may be wary about giving this app access to their bank account, but I have used it for years and it’s been nothing but helpful!
What are some of your New Years resolutions? Do you ever stick to them? Let me know in the comments section below.
This post is a part of Plan Week 2019. Catch up on posts you may have missed here: