After the joy of the holidays wears off, your bank account might not look as… festive as usual. Don’t worry, the New Year is a great time to get back on track after your holiday spending spree (we get it, you needed to buy matching pajamas for your whole family to Zoom in).
The key to making 2021 your best financial year yet is to make—and stick to—a monthly budget. If you’re used to taking a close your eyes and hope for the best approach to your finances, you’ve come to the right place.
Read on to learn how to make a monthly budget for the New Year.
The Right Money Mindset Matters
An important part of making a budget is to treat it just like you would any other goal—which means you need motivation. Think of it this way: if you wanted to get fit, you’d probably follow fitness accounts on social media or put your favorite skinny jeans in the front of your closet.
Approach making a monthly budget the same way by seeking out money motivation. You can do this by:
- Writing down your long-term financial goals
- Making a vision board of what you want to do or buy first
- Getting advice from friends and family who share your finance-savvy mindset
- Researching travel destinations you’re saving up to visit
- Making a plan to track your progress
- Thinking about how your life will change once you pay off debt
Finally, it’s helpful to view budgeting as a positive life-changing tool rather than a fun-limiting chore. This brings us to our next tip…
Keep it Real
Let’s go back to our fitness analogy. If we told you the only way to get in shape was to work out for an hour every. single. day. (doing a workout you hate), chances are you wouldn’t stick to (or even start) that regimen.
The same thing applies to making a budget.
The truth is, you are going to go out to eat, take the occasional vacation, and treat yourself to new clothes once in a while. The trick is creating a budget that allows you to indulge in moderation. In fact, a good budget can actually make treating yourself more enjoyable since you won’t feel guilty—see, it’s in the budget! I’m in the clear!
After all, what’s life without a little fun and adventure?
Get With the Times
As we approach 2021, there’s technology for almost everything—including budget tools. Sure, you could spend hours plugging numbers into Excel (if you’re one of the rare people who actually knows how to use it), or you could use an app that makes the process so much easier.
It seems like a new budgeting app is released every week, but we recommend sticking with a trusted name like Mint.
It’s All in the Details
As you think about what to include in your budget, you’re probably not going to forget big-ticket items like rent or student loans. What you might forget are things like:
- Subscription services
- Pet care
- Haircuts
- Gym membership
- Medications
These items usually aren’t huge expenses, but they add up quickly. That said, don’t stress about making your first month’s budget perfect. Part of successfully managing your money is to constantly adjust and adapt, so you can add or remove expenses from your budget as needed.
New Budget, New You
The New Year is a chance to start fresh, and budgeting can make you feel like you’re living your best life. Feeling in control of your finances (rather than feeling like they control you) is worth giving up impulse shopping and hope-this-goes-through credit card swiping.
If you stick to the tips above, you’ll be able to take the year by storm. Cheers to a New Year, a new budget, and a new you!