New Year’s is just around the corner. Soon, you’ll be at a party full of friends and dressed to the nines, watching as the clock hand makes its way closer to midnight. You’ll count down the last seconds of the day and cheer when it officially changes to the new year.
And the moment the new year begins, you can start working on your resolutions — whether that’s going to the gym more often, tackling a reading challenge or finally taking up those language lessons you’ve been putting off. One more resolution that you should add to your list is this: making a budget. In fact, it could be the best goal to give yourself for this upcoming year.
Why Is a Budget So Important?
Without a budget, you might find yourself in stressful financial situations more often. You might find that you put your account into overdraft or pay your bills late. Or worse, you don’t have any savings stashed away and can’t afford emergency expenses that crop up.
In this situation, you could turn to online borrowing options when you need help managing expenses without any savings. A personal line of credit loan could help you pay to resolve the emergency in a short amount of time — that is, if your application gets approved. Once you use the personal line of credit loan, you will have to follow a steady repayment plan in the form of a monthly billing cycle.
You can avoid these financial mishaps with the help of a reasonable budget. You will know exactly how much you can afford to spend before putting your account into overdraft. You can plan for all your upcoming bill payments so that everything gets paid in full and on time. And you can put away savings for emergencies.
How Can You Start Budgeting?
Figure Out Your Type of Budget
What type of budget do you need? If you’re living on your own, you will want to do a personal budget. If you’re living with a romantic partner, you’ll want a shared budget. If you’re living with a big family or a lot of roommates, you’ll want a household budget. You’ll want to pick the type of budget that encapsulates all of the incomes and expenses involved.
Determine Your Income & Expenses
Once you’ve figured out what type of budget you need to start, you’ll need to gather information. Try your best to calculate your monthly income (paychecks, benefits, estimated tips, etc.) and expenses (rent, utility bills, groceries, etc.).
Choose Your Budgeting Method
You can make your budget by creating a spreadsheet using pen and paper or spreadsheet software on the computer. Or you could download one of the best budgeting apps available on your smartphone, computer or tablet and then follow the instructions. Most budgeting apps can sync with your various bank accounts, allowing you to see exactly how much money you earn, spend and owe in real-time. This information will come in handy.
Adjust, Adjust, Adjust
Your budget isn’t set in stone! You’ll want to review the terms that you set every single month to see whether they are effective or not. You might find that you were too restrictive in some categories and too lenient in others. You’ll need to make adjustments as time goes on to make sure that your guidelines perfectly fit your financial lifestyle and your goals for the year.
New Year’s is the perfect time to start budgeting. Don’t wait another week!