When the year starts to come to an end many people reflect back over the past several months and take a look at where they are financially, in most cases many are really not happy and don’t feel that they’ve made much progress. In some cases their financial situation is worse at the end of the year than it was at the beginning. This begins to create a desire to make the next year much different and this is where New Year’s resolutions start to become something of interest.
The problem with this is that most people will start thinking about their financial changes early by way of New Year’s resolutions but not really put it into any form of planning. If you have any hope of changing a financial situation around at all then it means that you really need to think about a budget. Not just think about it but plan it, implement it and stick with it. There is no need to explain why a budget is important because like anything part of its credibility is being organized with your money.
Many people will put off planning a budget because it means that they really need to scrutinize their financial situation realistically. They can no longer bury the bills in the drawer or not take a close look at really how bad their situation is.
The first thing you want to do is have the proper way of being able to track your finances. You have a couple of options for this. You can do it the old-fashioned way with pen and paper, or you can use your computer and set up a spreadsheet. You also have the option of being able to use software that is geared for budget setting. The problem with this is often their generic and when it comes to your finances you really need to have a personalized plan.
One place where change is really going to be important is tracking all of your expenses including the small ones. It’s easy to look at the big ones like your mortgage and vehicle expenses, but often the smaller ones are forgotten about. For example, you know how much you may have spent on your credit card this month but you haven’t taken a close look at exactly how much interest you’re paying just on this monthly expenditure.
Another thing you want to do with your budget tracking is make sure that you do it at least on a weekly basis and preferably daily. Leaving everything to the end of the month is one of the pitfalls when it comes to getting your finances in order. A lot of transactions take place during the month with your personal money spending and by leaving them to the end of the month it means you may have several hours work ahead of you. Start by planning to take an hour out on the weekend to work on your budget and preferably do this on a Fridaynight as weekends are the two days where people tend to spend more money. By having a firm handle on what you can and cannot spend is going to help you to eliminate some of the unnecessary weekend spending.
