Time to put that credit card away and start spending wiser! The new year
is a perfect time to get your budget in order and finish out 2016 strong.
If you had some less than wise spending habits throughout the holiday
season and last year, here’s exactly what you need to do:
Make a plan.
This is the most important and often overlooked aspect of getting your
budget together. You need a plan, and it shouldn’t just be to have
money left over in your account when the calendar changes to the next
month. A plan will help you understand why you need to spend less and
save more. What are you trying to accomplish with your new plan? Pay down
debt? Save for a vacation? Buy a new car? Plan it so you can make it happen.
- Face your debts.
This is another overlooked part of budgeting because for some it’s
simply too painful. Face the facts. How much do you really owe? Write
it down in one big number and then prioritize your debts. What needs to
be paid first? Focus on the debts that are directly related to how you
live and work – your mortgage, auto loan and the like. If these
don’t get paid first, it’s a problem. Then focus on paying
down higher interest loans, credit cards and other debts. Consider using
a snowball payment method to get more paid off and end the year stronger.
- Make yourself use cash for new purchases.
Debit cards and mobile payments make it easier than ever to spend money
– and that’s a bad thing! Carrying around a set amount of
cash for your spending like groceries, gas and extras will help you keep
your spending under control. Unlike electronic payment methods, it’s
easier to see exactly how much you have left to spend. You’ll also
avoid high interest charges and other fees related to spending with credit
cards. Figure out your weekly spending budget, and then take out that
amount of money for your expenses. This approach will help you realize
how much you’re actually spending, and control your buying as well.