By: Maria Lindstrom
January 13, 2020
Welcoming in a new year offers time to reflect on the past year and look forward to the year ahead. Whether you are the type to set new years’ resolutions, the beginning of the year brings a timely opportunity to evaluate and measure financial goals for the upcoming year. Do you plan to go on the trip you’ve always wanted to do? Start a new workout program? Start paying off student loans?
As you look forward to the year, prioritize your goals to best fit your wants and needs. Then yourself how you are going to pay for this goal. The first step may be to budget for these plans.
According to Ron Blue, a budget is a “series of pre-made decisions that guide you as you spend your money so that you can stay within your income”. A budget can be as simple or complicated as you like. It allows you to know where your money is going and how much you have leftover to spend.
You may be wondering; how do I even begin this process? The good news is, there is no single way to budget – you can use what works for you! Ron Blue explains that budgeting first begins with tracking expenses, setting and organizing a plan, and then tracking this plan. Free budgeting apps such as Mint and EveryDollar can connect to your personal bank account to send reminders when you have gone over budget or when large expenses occur. For those with experience with Microsoft Excel and who desire more structure, various Excel templates exist to aid in tracking expenses and placing into a budget (templates can be found here).
For those who work better with hands-on, you can obtain all receipts for the month and write down amounts spent in categories for the month. The key is to keep it simple and use what works best for you. Once you know your spending for one month, you can look into each month and adjust for each year to set expectations for the year.
Life is full of unknowns. During the budgeting process, it may be difficult to plan for each month. Saving a certain amount each month can also aid in planning for these items. Ron Blue recommends setting aside 3-6 months of living expenses for unplanned expenses that may arise. In all, we can hold onto God’s promises as we begin to plan for the new year that He will never leave or forsake us.