When implementing new budgeting goals for the new year, it’s easier said than done. Trying to do an overhaul of your finances all at once can be overwhelming.
Instead, try breaking your budgeting goals for the year down into small, manageable steps. This way you’re much more likely to achieve them, and you won’t burn out on them all at once.
Let’s take a look at how to realistically establish your budgeting goals for the New Year.
#1. Set a Personal Savings Goal
Instead of just picking a random number, make a calculated decision about how much you want to save this year.
Look at your income for the week and how much your expenses are. By doing this, you can quickly work out what you could realistically start saving each month.
Ideally, you should come up with both a monthly and yearly savings goal. Breaking it down like this will help to make it more achievable.
#2. Establish Your Emergency Fund
If you don’t already have an emergency fund tucked away for a rainy day, then this should be one of the first savings goals on your list for the new year.
This can also sync up with your personal savings goal. Ideally, you should have a minimum of three months and a maximum of six months worth of expenses saved up in your emergency fund, in case the unexpected happens.
Remember that this includes all of your weekly expenses.
#3. Track Your Expenses
It’s easy to get caught up in the day to day of life, and not even think about what’s coming in and what’s going out. However, only having a vague idea of how much you spend a week or even a month can seriously get in the way of your ability to budget.
This is why tracking all of your expenses is so important. To begin with, you want to keep track of how much you spend on rent or mortgage, utilities and other bills per month.
Beyond this, it’s good to take a look at what you spend on other items like food, entertainment, and clothing.
#4. Invest in Something
What is something you’ve wanted to invest in for a long time? Perhaps it’s your retirement account or even a completely separate investment.
If you’re interested in putting your money somewhere where it could grow, then you’ll need to do your research. The first thing to do is decide what industry you want to invest in.
Whether it’s cryptocurrency or real estate funds, there are a lot of investment options available. You could even ask the advice of a friend who regularly invests so that they can bring you up to speed on what’s low risk and high risk.
When thinking about how to set yourself realistic budget goals for the new year, it’s important not to try and do too much at once.
When you’re motivated to save and budget, it can be tempting to dive in and go all out. However, most people stay within budget and slowly save their money by playing the long game.
If you’re patient and consistent with your budget goals, you can implement tools like this to have a better year of spending and saving.