The start of the new year is a perfect time to create a new budget or re-evaluate your previous one. It may be due for some TLC after the holiday season, anyway. Here are three tips to help you and your wallet start off the new year right.
While reflecting on the past year, give thought to your financial decisions. Where did you spend too much? Where could you have spent more? In what ways can you curb your spending? These are all good questions to consider when attempting to improve money habits. Decide what you want out of the New Year and what financial habits you need to implement to make those goals happen.
Stick to the 50/20/30 Rule
What is this rule? It’s a simple way to start your budgeting plan. Generally, 50% of your paycheck should go to your needs. These are your essentials like groceries, car payments, utilities, rent, etc. Twenty percent should go into savings and toward debt repayments. The final 30% goes to whatever you want: restaurant dining, the movie theater, road trips, shoes, etc.
Don’t be broad when establishing your goals. Put specific rules into place to achieve your objective. For example, don’t say, “I will save more of my paycheck every month toward a new car.” Say, “l will set aside $100 from my paycheck every month toward a new car.” This way, you have a clearly defined number and you are more likely to adhere to it.
Lastly, don’t fret. You can do this. Remember, Dave Ramsey once said, “Those who do not manage their money will always work for those who do.” Managing your money is empowering. Do it now and thank yourself later!
What are your financial goals for the New Year?