As 2017 nears its end, a new year brings fresh opportunities for you to finally take control of your personal finances. Setting a budget is not out of reach for the average consumer or household. Anyone with the desire to better their financial stature can find this article a worthwhile read. Here’s four tips for setting your budget in 2018.
Reevaluate Your Finances
Your budget should be reevaluated at least every year to account for any new changes in expenses or income. Look at your current monthly paycheck, specifically the net amount you are able to take home after taxes are deducted. Next, look at recurring expenses. This includes monthly rent, utilities, phone service, etc. The more accurate your numbers are, the easier it will be to lay the foundation for investing and saving money.
Erase Your Outstanding Debt
Getting out of debt should supersede your goal of saving money. Left unchecked and unresolved, the interest accrued from your credit card and mortgage debt can leak valuable dollars from your accounts. Sure, it’s just a few percentage points of interest, but it can add up over time. Take baby steps to avoid getting overwhelmed by debt. Consider debt consolidation to simplify the process of paying off multiple sources of debt.
Leverage Financial Technology
Financial technology is helping create a financially smarter and better equipped generation of people. One example is Mint. For the past few years, the software has been helping thousands of users design and achieve their individual financial goals. Mint is an intuitive platform that helps you monitor credit card accounts, save for specific milestones, set up a retirement nest, and any other objective you have in mind.
Consider Following the 50-20-30 Rule
The 50-20-30 rule is a budgetary technique wherein you divide your expenses into three main categories instead of having to keep track of multiple smaller ones. 50 percent of your income should be allocated to basic necessities, such as housing, food, water, and utilities. 20 percent should be dedicated to savings. Lastly, use 30 percent of your budget on expenses that aren’t necessarily important but do improve the quality of life. This includes your phone service bill, monthly media streaming subscriptions, and your various trips to the cafe.
Own the new year with these four simple but powerful budgeting techniques.
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