Revise and Repurpose Your Budget
Can you believe that the year is almost over? As someone said to me today "This year has been the fastest slow year ever."
Yup. Even though it seems like every single day has dragged on eternally, here it is December and time to start planning for next year's budgeting and goals.
And since it is also time to buy, wrap, decorate, cook, celebrate etc, I know you are busy, so I will keep these tips short and sweet.
If you already have a budget system in place, then it shouldn't take you more than a couple of hours to map out your plans for next year.
So, the basics. What should you do to get your money ready for the year ahead?
1. Take some Budget Notes
If you've been keeping track of everything so far, just glance back through your monthly budget sheets and take notes.
- What worked best for you?
- What didn't?
- Which areas were hardest to stick with?
- Are there any permanent changes in expenses or income?
- Are you planning to spend less next year or add an expense?
This is a good time to jot down what you estimate for all holiday spending while it is still fresh in your mind.
This gives you a realistic view on how much to budget for gifts/donations per month for next year.
2. Choose a System
If your old system wasn't working for you, now is the time to read up on some new methods.
For example, maybe you've been using spreadsheets but find it a hassle to go online constantly to update purchases.
Or maybe you are using a budget binder but the templates aren't quite right for your household.
Or it could be that you've been trying the envelope savings method or other system and just aren't happy with it.
That's okay. Just change it up.
3. Get Your Supplies in Order
Wouldn't it be nice to wake up on January first and have your perfectly customized system all fresh and ready to use?
The first of the year is when we all feel more motivated and excited about our goals. But that excitement can quickly wane if we have to spend the first few days doing tedious prework.
Instead, have your stuff ready to go, and you will love yourself.
If you want to go with the old school paper budget, (and don't want to design your own charts) you can find a lot of great printables on Etsy.
This printable budget planner is especially sleek and well organized.
4. Face Your Debts
If you've been working hard to get debt-free this year, then you have probably tracked all the payments you've made, and where any extra cash came from to pay on those balances.
But are they really working?
For instance, are you working hard to hack down a big, hideous debt with extra payments, only to come up short in other areas?
You might feel great about how much lower that big balance is now, but make sure it isn't costing you extra somewhere else.
If things aren't balancing correctly, then you may have to adjust debt payments, even if means making slower progress than you would like.
Now is a great time to look over all of your debts if you haven't done so recently, and see how far you've come and how far you have to go.
5. Face Your Expenses
If you are pleased with your expenses for the year, then you don't really have to do anything here. Just check over everything to make sure you accounted for all spending.
If not, then now is a good time to try and find a way to cut some of your costs.
- Is there a way to lower your car insurance?
- Can you cut out a subscription or membership?
- Can you work a bit harder at saving on groceries or household goods?
If you don't like the idea of giving up too many things all at once, you can always aim for slashing expenses for a limited time, such as one month only, 3 months only, etc.
This gives you time to see how well you can live without certain things, and time to let your bank account recover after the holidays too.
If you don't like the restrictions you can always drop them. Just be sure to keep track in your budget!
6. Pin Down Your Fluctuating Expenses
Ugh! This always gives me such trouble. Unlike utility bills, there are some bills that just appear seemingly at random. For us, this includes prescription medications.
No matter how much I try, I can't seem to track these correctly.
Whatever your "tricky" expenses are (fuel, medications, business supplies, etc.) you will probably have to do a lot of receipt reading to budget for them. You may have to estimate, just don't forget include them.
7. Set Your Goals
This is the fun part! At least while you are optimistic and maybe slightly hungover.
What are your goals for next year? Take some time to write them down, and don't JUST focus on financial goals. Life goals are important too and can effect (or be affected by) your budget.
(If one of your goals is to learn how to play the violin, you will most likely have to pay for some lessons.)
Get excited about all of your goals, and adjust your budget to support them realistically. When facing your financial goals though, consider these things:
What is your biggest goal of the year? (Earn a certain amount? Pay off a certain debt? Reach a certain savings threshold?)
What is your long term goal and how does what you do this year support it? (Early retirement? Paying off your mortgage? Quitting your day job?)
What are your smaller goals?
What can be done soon, and what will take more time?
Once you have clear goals in mind it is easier to focus on your action plans. It really helps to keep your goal list where you can see it often.
Print it out and hang it by your desk or the door, make it your wallpaper image, or slip it in to your budget binder.
7. Make Your Budget YOU!
No two people have the exact same financial needs, so make sure you spend more time brainstorming how to make your budget all YOU.
For instance, maybe you just want to track income, savings and expenses but don't necessarily need a tight budget. That's great!
Don't feel like you have to make a restrictive budget just because someone else does.
Likewise, don't feel like you HAVE to add categories in that you don't need or can't afford.
Example: a lot of people add college funds, emergency funds, gift funds and other savings accounts to their budgets.
While that is great for them, it might not be for you. If you don't have it, you don't have it. So, don't feel like you need to live on oatmeal just so you can fill up one of the other columns.