Financial Advice

Manage Your Finances


Start the New Year with a New Budget

Young woman working on her budget.

Have you always wanted to have a budget, but didn’t know where to start? Well, there’s no time like the present. Especially as the year comes to a close, December is a great time to look at your expenses and create a new budget you can implement in January. If the year ahead includes financial goals or aspirations, you must master living within your means and managing your money.

Budgets don’t have to be boring or agonizing. Just think of your budget as a window through which you can better see your monthly spending. After all, before you can determine where to make improvements in your spending tomorrow, you must see the reality of your spending today. Here are three easy steps to create a new budget:

Visit, give us a call, or stop by your local financial center anytime to chat with a Personal Financial Representative or learn more.

  1. Write Down Your Expenses — Take your time and create a list of all your regular expenses. At this point, you’re just making note of the categories. A basic budget will include things like rent/mortgage, cable, phone, electricity, water, vehicle, food, and entertainment expenses. Don’t forget to account for quarterly and annual expenses too. It’s best if you can refer to the previous year’s bank and credit card statements. That will help you avoid forgetting those one-time expenses. A well-done, comprehensive budget will also include less frequent expenses, such as property taxes, insurance, or healthcare premiums.
  2. Calculate Your Expenses — Once you have a comprehensive list of categories, it’s finally time to plug in some numbers. Again, you can look back at previous statements to see just how much money you’ve been spending in those categories. Take all of this research and information and then add it up. How does the sum of your expenses compare to your take-home pay? If you don’t have enough money to cover your expenses, it’s time to take a look at your budget and decide where you might need to cut back.
  3. Leave Room for Savings, Debt, and Emergencies — Add a line to your budget for savings and emergencies. If you’re in debt, you’ll especially want a line item in your budget for debt payments. And it’s always best to pay more than the minimum payment, if you can.

Remember, budgeting is a tool, and it can take months to become accustomed to adhering to and maintaining a new budget. But it’s doable. Just give yourself time to adjust. Do your best to keep track of your spending and expenses in an ongoing manner and notice areas where you can improve. The more you improve, the more money you can save or the more debt you can pay off, and that’s worth it. There are few pursuits as worthy as that of financial freedom.