It’s a new year, do you need a new budget? Now that the holidays have passed – along with the financial burden that comes with holiday season, are you feeling like your finances need a makeover? Daniel Cox, Controller at Hockley Valley Resort, offers you his top 5 tips for getting your budget back into shape:
1. Just the facts: Help determine how much you can spend by starting with how much money you actually have. Don’t estimate, don’t divide your annual income by 12 – go by your actual take home pay each pay period – that way you can do a weekly budget based on actual numbers.
2. Follow the rules: A great formula to use as a guide is the 50/20/30 rule. This means that 50% of your income goes toward essential expenses, 20% goes to long-term financial goals and 30% or less goes to your “fun fund.” This can be adjusted to your needs, of course, but it’s an easy way to stay on track.
3. Cash out: Measure the amount of money you’ve allowed for discretionary expenses (or your “fun fund”) in cash each month. That way you avoid adding to any credit card debt, you know at a glance when you’re getting close to your limit and there’s no way to go over your allotment.
4. Details, details: Re-adjust your plan on a monthly basis to stay focused and on track. Look at what worked the previous month and what didn’t, and tweak your plan accordingly. It doesn’t exactly take care of itself; for maximum success, you need to be on top of your budget on a month to month basis.
5. Tech talk. Do you still get paper billing? Consider automating bill payments as a way to ensure you pay on time and avoid late charges. Interest and late fees can really add up and eat away at your savings. Having all your billing come out of one account can also help you really stay on top of where money is going and where you may need to fine tune your plan.
Budgeting can seem daunting and can be a stressful endeavour. Take it one step at a time and consider these tips to simplify your process and set you on your path to success!
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