Ten budget tips for the new year

If you are anything like us, your News Year’s resolutions probably included weight loss and better budgeting for 2017. In fact, 90% of all New Year’s resolutions made include improved financial health. And while it’s easy to promise yourself to work on a better bank balance in the new year, it often proves more difficult to stick to.

We’ve put together 10 budget tips to help you budget better and stick to that new year’s resolution.

  1. Make a list of priorities.

Think about what you want and what’s important to you – a house, a car, putting your kids through school or university, going on a fantastic holiday, etc. It sounds silly, but if you aren’t intentional about articulating what your priorities are, you aren’t likely to get there.

  1. Have regular budget meetings.

When you are budgeting with a partner, you have three sets of priorities: yours, your partners, and the ones you have together. Make sure you sit down and talk about what’s important to both of you and check in with any information, unexpected expenses and how all these things impact and shift priorities is important. This is good for finances and relationships!

  1. Work with money you have now.

When working on a budget, people tend to look at how much money they could potentially have to spend in the future. This is a mistake. When you work out a budget, work with how much money you right now. You can’t guarantee that raise or bonus a few months from now.

  1. Set money aside for your immediate obligations.

Start with the obvious and most important obligations: Rent, Utilities, Groceries, Transport, minimum payments on Debt. This will help you stress less because the critical items are covered.

  1. Prepare for non-monthly expenses

There are bills that roll around every year, that you still need to be prepared for. For example, vehicle licensing, levy increases, etc. You’ll need to sit down and make a list of these items and how much they cost. Then set aside a monthly amount, so that when the time comes, you have enough money to pay. For example; if vehicle license renewal costs R200 every year you should set aside around R20 a month to cover the costs when they come up.

  1. Create a debt plan

Choose the debt with the lowest balance and budget more than the minimum instalment. When this debt is gone, take the money you were sending to it and start budgeting it toward the new lowest balance debt. Pretty soon, all that debt will be gone!

  1. Don’t forget the fun stuff

If you want to stick with budgeting for the long haul, you have to give yourself some breathing room. Don’t cut out all the little things you love that improve your life. Maybe you don’t eat out at a nice restaurant as often as you used to, but make sure you budget to do it every once in a while. The fun stuff is important too.

  1. Track your spending

Once your budget is in place, track all of your spending. Every cent.  Your budget is your new True North, instead of checking your bank balance to see what you can spend or what you have, you’ll be consulting your budget. Before going grocery shopping, check to see what you have left set aside for groceries. You might have R1,000 in your checking account, but that money has been assigned to other jobs, so you will want to stick to the R70 remaining dollars you have allotted for groceries. This simple shift in thinking is powerful because it allows you to make better decisions, better aligned to your true priorities.

  1. Adjust and adapt

No one can predict the future so you may at some point need to adjust your budget. Adjustments are good. Your life changes, your circumstances change, your priorities shift—your budget has to keep up! So, don’t be afraid to change your budget. When you overspend in a category, you just have to decide where that extra money can and should come from.

  1. Budget for the future

As you begin to budget, your money will start doing exactly what you tell it to do. You will be in total control. You will find yourself with more and more disposable cash. People often say it feels like they got a raise! When this happens, start budgeting ahead. Begin budgeting for the next month. If you can get a month ahead of your expenses, and be spending money today, that you earned last month, you will experience peace of mind like you never thought possible. Zero stress.

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