If you are like most people, you’ve decided that 2019 is going to be the year that you finally set a budget and stick to it. However, like most other people, you have also procrastinated when it came time to actually calculate what that budget would be. It’s not too late! The earlier in the year you get to it, the easier it will be to balance your debts against your income. These four tips should help you plan your budget so that 2019 really can be the year of financial health.
1. Assess Your Income
You really can’t plan a budget unless you know exactly what you are working with. The very first step, therefore, should be to list all your income. If you are on a salary, this is easy to do. However, even self-employed sole proprietors can average what their baseline income will be and start from there. Bear in mind that the more accurate you are, the easier it will be to continue on to each of the following steps.
2. List Your Expenses
Expenses are those recurring items such as rent/mortgage, utility bills, food and anything you pay regularly to keep food on the table and a roof over your head. This would also include a car payment and, unfortunately, any lines of credit you are repaying over time. All this needs to be itemised and carefully calculated. This money gets taken from your income before anything else and set aside to meet these debts.
3. Be Honest Balancing Needs with Wants
It’s time now to go back over the list of expenses. How many of those are not really necessities? Perhaps you’ve budgeted for expected repayments on credit cards because you have been using them regularly for such things as new clothes you really don’t need but want because they are the latest fashion. If you are honest with yourself, you may see that many of those ‘expenses’ are not necessary. However, it is always prudent to allow for an entertainment budget because you can’t be expected to work all the time without any relief. Always set aside money for this and you should have an easier time sticking to your budget.
4. Allow for Unexpected Expenses
Here is one last item which too many people fail to include in their budget. Always plan for the unexpected. Set up a savings account where you faithfully deposit money. It could be a few pounds a week but the object is to have a rainy day fund. What if your car should suddenly need a major repair? If you have a good bit of money set aside, you may not need to put such a large expense on a credit card. The good thing to know is that there is help out there for those emergencies you hadn’t foreseen and such things as a payday loan can help during a tough time.
It is just advisable to use them wisely. Companies like Cash Lady can have you qualified within a single afternoon so that your car can be fixed by the next working day, but don’t go in debt over your head! Remember they will need to be repaid, so use them sparingly for those times when you really need funds you can’t get quickly enough through more conventional loans. It’s your budget, so remember to plan just a little more than you need and 2019 really can be the year that sees you back on the road to financial health.