Budgets 2017 – New Year, New Budget
Ahhh… The New Year is upon us. Many look at the New Year as a time of reflection. A time to reevaluate what is working in our daily lives and what needs a facelift. Yet, in all the Holiday hustle and bustle, we forget to reevaluate one important thing…our budget. After the Holidays, many are left with mounds of credit card debt and are left thinking, “Now what?” Where are the funds to cover the debt. or to pay the bills?
Moving forward, it is best to enter the New Year with a fresh outlook on your budget, among all the other resolutions that come to mind. Furthermore, you are reading this post, so you are making a step in the right direction. As you plan out your resolutions, keep your budget as a top priority! Staying within your budget in 2017 will help everything else fall into place like a key into a lock. With a few simple budget calculations, this will be a great year for all of us, my friends!
Rock Your Budget 2017
If you are new to budgeting and need to start a budget plan this year, this post is for you. In my post I will detail a simple and easy monthly budget plan and add tips on how to get real with your budget. I will also provide a sample budget to get you started.
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Why Start a Budget This Year?
I am wishing everyone the best in this New Year! I know 2017 has great things in store for all of us! Keeping to our budgets is one of them! The top reasons to start budgeting are as follows:
- keeping track of your money will reduce stress
- keeping the peace in the family (one of the biggest fight couples have is over money)
- help you save for an emergency fund (no more relying on credit cards)
- be able to retire one day (some people want to work into their 70’s, but not me)
- be able to make purchases without regret and guilt (Why did I buy that?)
- pay bills on time (less late fees will save you money)
- provide “needs” for your family (needs vs. wants)
It is never too late to start a budget and stick to it. This will give you more money in the future.
Save, save, save! Keeping up with the Joneses is a thing of the past! Keep you money in your pocket and be happy with what you have!
Budget 2017… Here we go!
First make a column of all your monthly expenses. Even if you are billed yearly (For example, I pay my car insurance in one lump sum to save money), divide this number by 12(months) and put it on your budget to ensure you have enough money to cover the cost when that bill comes in the mail. This will include the following but may need adjusting if there are extra expenses not shown on my list i.e. (credit card debt, student loan debt, gym membership, etc.)
Expenses (This will be your first column)
Car Payment or Transportation
Insurance (Car, house, health)
Entertainment (Eating out, Shows, Magazines)
Above are some basic categories. If you have other expenses, write them in too. At one point, I owed $23,000 in student loans and was able to pay it off by adding it to my budget and paying more than the minimum. You can do this too with student loan debt and/or credit card debt.
Side Note: I do not recommend accumulating credit card debt, but if you already have credit card debt this a top priority because you are paying interest, and by only paying the minimum, it will take years to pay this debt off. Also by the time you actually pay off the debt you will have paid an enormous extra amount. (YIKES!)
Next, you need to look at how much you have coming in every month. For the purpose of this example, let’s use the number $2,800 per a month.
This should go at the top of your second column and now you can start subtracting what you owe each month and come up with a number you can work with, to start saving for your emergency fund and retirement. (ROTH IRA, 401k or 403B)
Here is a sample budget using the total $2,800 income per a month and estimated numbers for the categories (Amount paid will be your second column..noting this because the spacing will show up differently if you are reading on a mobile device):
Expenses Amount paid
House Expenses/Rent $800
Car Payment/transportation $250
Insurance(Car, House, Health) $400
Entertainment(Eating Out, Shows, Magazines) $100
Retirement (ROTH IRA) $200
Total bills $2,600
Extra money $200
I Have My Budget, Now What?
The money left over will go into an emergency fund, until you have accumulated enough money to cover the cost of your salary for at least six months. This fund can also be used to help with extra expenses such as needing a new roof or replacing your water heater that flooded. Yes, this happened to my family and we needed new carpet too!! Since we had an emergency fund in place we were able to cover the cost. However, you should note that when these instances happen, it is wise to then continue to contribute back to your emergency fund.
Keep in mind, bills should come first and extra expenses such as entertainment and savings adjusted in order to pay your needed expenses.
After saving enough to cover six months of your salary, you are free to do what you wish with your extra money. (Or invest it… cough, cough). If there is an item you desire, use your extra funds to save up for it. Do not, I repeat, do not put your “want” on a credit card.
Cheers to you for taking the time to put your budget first this year! Let’s leave our budget stress back in 2016 and move forward!
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