I did it, I said the B word! It is the new year and even if you don’t typically make resolutions, budgeting is a must for anyone! If you have avoided the B word simply because you just don’t know where to start, consider these few tips to get you thinking and staying motivated with that discipline you need to change that budget around!
Budgeting Right In The New Year
Have realistic goals
To have a goal such as ‘I want to pay off my cars and all credit cards and be debt free by 2016’ is highly unrealistic. My husband and I became debt free this year and have remained debt free and it took us 10 years to pay off student loans, credit cards, lines of credit and cars after we married and merged money. Setting a goal like paying off your low-interest, $7000 student loan is more realistic! Don’t set the goals so high you are left discouraged.
Communication is the most important action you can take to start a new budget and stay on track. Communicating with your spouse! Money and marriage does not have to be a bad thing and to celebrate the rewards of better budgeting together and instilling trust with money as you discuss every money-in that occurs and how it will be spent becomes a positive. Communicate every pay period. Team up to know what is owed and what is left over.
Communicate with your bank! I hope you have been kind to your accounts because your bank will be there for you if they see a positive relationship with your banking accounts. They may be able to offer you a low interest, $0 balance transfer fee line of credit or card to consolidate multiple debts into one. They will guide you on what loans to consolidate (high interest, high balance) and what ones you should not consolidate (low interest like student loans and low balance debts as you will chisel those ones away first).
Communicate with your cable and insurance companies. You will be amazed how all of a sudden your bill can magically lower when you call and say “I need to see about lowering my bill. I am shopping around and want to know what I can do…?” Do this about twice a year! Stay in good standing with them and they will help you too! We typically end these phone calls with lower bills or sometimes it is that they upgrade all of our cable equipment for free. Either way, you will get something from it or tell them you’re leaving because ABC company has….
Whether you have $20 coming back on a return or $500 coming from a raise, have a plan for it! When you don’t know where to put an extra few dollars and you need it somewhere besides in your wallet for mochas, have a slush fund! I know many financial advise says they avoid the slush word, but we have one and it saves us! The slush fund is for those less typical expenses that always occur every month! Your slush can be used for things such as annual expenses-your Costco membership, home insurance dues, birthday gifts for others, etc..
No two households can budget the same
Remember that what monies coming in and out is very different than your neighbor, sister and friends. What they swear works for them, may not work for you in a budget. Take the time, grab a pencil and paper and together (if you are married) draw and write out your plan. Have a monthly forecast system so when you sit down each pay period, you have a map of what is coming in and going out, then what is left over! Make it yours, make it realistic and stay disciplined!
To learn more and see examples of creating a budget forecast, read Budgeting Tips for 2015