Why not make budgeting your New Year’s resolution?

For many of us, a new year means a new start. Whether that means quitting smoking, losing weight or having a change of career, January can offer a great opportunity to turn over a new leaf and achieve your goals for the year ahead.

If you’re looking to make a resolution that you can stick to for 2013, why not try to turn your fortunes around – by making budgeting your New Year’s ambition? After all, what better way to get your finances back in shape after Christmas than by taking a good look at your income and outgoings and finding out exactly where you stand with your money?

Why is planning a budget a good idea?

So, the presents have been opened, the tree and tinsel have been packed away for another year and you’re left with the prospect of January’s bills, bank statements and other regular costs. It can certainly feel like a crash back to financial reality – and something of a shock for your bank balance.

However, a budget costs nothing to put together, but it could be invaluable when it comes to improving your finances for the future. The whole idea of creating a budget is to make sure you can keep track of everything you earn and spend every month, as well as helping you plan ahead for future costs by saving – and this budgeting guide could be a great place to start.

People often fall into financial problems if they lose track of their spending – but with a carefully planned budget, you should know exactly how much money leaves your account, and what it’s spent on, every month.

What’s the best way of planning a budget?

There isn’t a single ‘set’ way of creating a budget – but there are some practical ideas that could help you get started.

• Why not get all your receipts together from the past couple of months, so you can get a good estimate of what you regularly spend your money on? This could be particularly helpful when working out a food budget – helping you to spot areas where you could cut back.
• Consider doing things the ‘traditional’ way: sit down with a pen and paper and work out all your monthly income and outgoings, along with any savings or outstanding debts you have. If you want to keep a regular record that you can track and update, creating a spreadsheet on your computer could be ideal.
• Think about specific goals you want to budget for. You might be looking to put money aside for your summer wedding, for a holiday or to upgrade your car to a more efficient model. Whatever you want to save for in the year ahead, a good budget could help you make those things a reality – and give you the motivation to set aside the money you need.

Like all New Year’s resolutions, planning a successful budget won’t promise any overnight miracles. But with a bit of time, commitment and dedication, a budget could really pay off in the long run – and make 2013 the year you start getting your finances under control.

This article was supplied by the Debt Advisory Centre.