Saving money is one of the most popular New Year’s resolutions to make, along with losing weight and getting rid of bad habits. Of course, as we all know, sticking to our budgeting goals isn’t as easy as it seems. Usually, we start the year with good intentions, then find ourselves gradually falling into old routines by the time we hit Spring.
The problem you keep having with your budgeting goals might be that your strategy simply isn’t up to par. If you think that it’s time to make a change to your spending habits this year, we’ve got five simple steps that you can use to upgrade your budget for 2019.
- Have a Goal
One of the easiest ways to upgrade your budget and increase your chances of success? Give yourself something essential to strive for. While saving money for the sake of it is great, we often have a hard time keeping ourselves motivated without a clear target, particularly when we’re presented with sales and tempting opportunities to spend money.
Think about what you’d really like to accomplish in the next year and give yourself a goal to work for. Maybe you want to go on holiday next year or save some extra cash towards a deposit for a new home – the choice is yours.
- Stop Guessing at your Expenses
If someone asked you how much you roughly spend on your bills and living expenses each month, would you be able to answer them accurately? Often, we make mistakes in our budget because we guess at how much money we have left over at the end of each month after we’ve paid for things like loans, utilities, and the rent. However, if you pay for things through your bank account, there’s no need to estimate.
Get online and check out your transactions or ask your bank for a copy of your statements from the last few months and figure out exactly what you’re spending and way. This is the best way to figure out where you’re overspending.
- Remember to Budget for One Time Expenses
Another issue that people face when it comes to budgeting is that they only take their regular monthly expenses into account. Unfortunately, there are costs that crop up a couple of times a year that you need to be aware of too, such as your water bills, or your television license. Making sure that you save a little bit extra back each month for these infrequent expenses means that you’re less likely to be caught off guard when you’re suddenly hit with a bill.
As you go through your bank statement, checking out your spending habits, make a note of any irregular expenses that you notice. If you only pay those bills once a year, break the cost down into 12 installments, and remember to save that amount back each month.
- Be Realistic
If you have an important goal in mind, like saving for a wedding or getting a new house, it’s tempting to try and cut as much out of your spending habits as possible, as quickly as you can. After all, the less you spend each month, the quicker you’ll reach your goals. Although there’s nothing wrong with being ambitious, it’s important to be realistic too. The chances are that if you try to eliminate all the “fun spending” from your budget straight away, then you’ll fall off the wagon before you ever get close to your financial targets.
Instead of telling yourself that you can’t eat out anymore, or you don’t’ have the cash to go for drinks with your friends once a week, try cutting down a small amount at a time. For instance, limit yourself to drinks once every two weeks instead.
- Plan for Unpredictable Emergencies
Finally, it’s a good idea to make sure that you have a little bit of extra cash aside that you can tap into when things don’t go according to plan. For instance, if you suddenly need to pay for a new washing machine or an oven, the last thing you want to do is take all the cash out of your savings and start again from scratch.
Whenever you have a little money left over in your budget after you’ve paid for everything else, consider putting that cash towards an “emergency” fund that will come in handy whenever disaster strikes. This way, you’re less likely to encounter any hurdles that might make you give up on your budget altogether.