Similar to a New Year’s resolution a successful budget can be either extremely easy or difficult to maintain. Some of you may believe setting aside a portion of your paycheck will suffice. However, there is more to this process. It takes a well thought out plan and self control to not fall off the bandwagon and finally achieve your goal.
The best time to start saving is now! According to CNNMoney, 64% of Americans have less than $1,000 in their savings account and 34% have no savings at all. A successful budget requires a developed spending and saving plan. With the proper budgeting plan you can start to successfully save, pay off debt, pay monthly bills on time, and start making the most of your hard earned money.
Below you will find 5 tips to help you create a successful budget for 2017:
- Track Your Spending: To develop a budget, you first need to know how much you are spending. You can use a pen and paper or a smartphone app such as BillGuard, Dollarbird, or Goodbudget to help record your purchases- big or small.Tracking your expenses will allow you to understand how you are spending your money on housing, groceries, entertainment, miscellaneous, etc. Once you know how much each area is receiving you can then allocate your money appropriately.
- Determine Your Income: After tracking how much money you need financially each month its time to determine your actual income. In addition to your actual salary, you should include any extra funds you will receive this year. This can be cash gifts, items you sell, dividends, stocks, alimony, accumulated interest, and more.
- Automatic Saving Contributions: Direct deposit a portion of your paycheck into your savings account every month. If you set aside the money you do not see, then you won’t miss it. After a few months start increasing the percentage that you take away from your paycheck. You will start to see an increase in your savings account.
- Set Saving and Debt Payoff Goals: To determine if you are saving realistically and paying off debt, subtract your monthly expenses from your income. If you are making more money than you are spending and saving, then congratulations, you are budgeting wisely.For those who found that they are overspending, it’s okay- take the time to look over your expenses to know where cuts need to be made. It might take a few tries to create the perfect budget you need. It’s all about trial and error until you find one that works for you.
- Be Realistic: Set a goal that you know you can achieve month-to-month then aim to sticking within your budget. Breaking away from your budget occasionally is okay but not for too long!Now let’s see you try creating a successful budget for 2017! With the help of the 5 simple tips above, planning your budget is easier. Remember don’t jump into creating a budget before you investigate your spending and saving habits.