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Conquer Your New Year’s Resolution by Setting a Budget

Have you been putting off dealing with debt? Are you starting to get serious about saving to buy home in the next few years? Perhaps you are gearing up for a big vacation or trying to save for a wedding. Regardless of your immediate motivation, getting your fiscal health in shape is one of the best things you can do to secure your financial future. However, for many people it is also one of the most challenging things to get ahead of, making it a popular New Year’s resolution.

Here are five steps to get you started to help conquer this resolution once and for all:

1. Set a budget (and stick to it)

Creating a budget or spending plan can help you get more of what you truly want. It helps you reduce frivolous spending like eating out and focus your resources on what’s important to you (i.e., a new mortgage, a trip of a lifetime to Italy or contributing to your favorite cause).

2. Track your spending

Keep a record of everything that you spend for an entire month to show you where your money really goes. This can be an eye-opening exercise and is a key step to setting and maintaining a realistic budget. You will likely be surprised by just how much your seemingly little daily habits add up like buying a latte each morning.

3. Adjust your budget

Once you have the results from tracking your spending for an entire month, re-evaluate and adjust your monthly budget. Be realistic about any changes that you want to implement, especially drastic ones. One of the quickest ways to fall off track is by getting discouraged from unrealistic goals. For example, if you currently eat out multiple times a week, cutting your restaurant budget completely to $0 is not likely to be successful.

4. Make saving automatic

Have money taken directly out of your paycheck and deposited into your savings or retirement account. This helps to make setting aside money for savings a habit that you do not even have to think about it! And make sure that you aren’t missing out on your company’s 401k match.

5. Set realistic, measurable goals.

Set short-term and long-term benchmarks for yourself to keep you motivated and on track such as save $500 by end of March 2019 or save $20,000 down payment for a house by March 2020.

Reward yourself once you start making progress on your path to getting serious about your fiscal health - you’ve earned it! For more inspiration, check out “Habits of successful savers”.

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