10 Tips for Creating a Budget in the New Year


Each new year presents us with an opportunity to start fresh and put big plans into action. When it comes to personal finances or planning a purchase with credit jewelers, there is no better time to start than now.Here’s how you can make a budget to achieve your financial goals in the New Year.

1. Track Your Income 

To make an effective budget, first get a good sense of your income after taxes. Simply add up all your expected income for a given month–including all money you will earn from full-time, part-time, and side hustle work. 

Many smartphone and desktop apps now easily automate this process by linking accounts and income sources.

2. List Your Expenses

Once you’ve calculated your income, list out all your necessary expenses. Everyone’s responsibilities are different, but housing, food, transportation, and utilities are at the top of the list for most.

Once you know how much you’re required to spend in a given month, allocate left-over cash after those costs are covered.

3. Use the 50/30/20 Rule

The 50/30/20 rule is a budgeting formula that many people find helpful in organizing their finances. To use this technique, simply organize your expenses into three major categories. 50% of your income goes towards Needs, 30% to Wants, and 20% towards Savings.

This framework can help you stay on course to reach savings goals and gain a better understanding of where exactly all your money goes.

4. Live Within Your Means

Let’s face it, in our highly connected world, targeted ads appear everywhere, pressuring us to spend now. Resist the temptation of lifestyle inflation!

Next time you feel the urge to make an impulse buy, instead put the purchase on a list and revisit it 30 days later to see if you still want it as badly. You’ll find more times than not that you won’t.

5. Try Cash Stuffing

Cash stuffing has seen a resurgence thanks to TikTokers. Getting started is easy, all you need is envelopes labeled with each budget category and cash. 

Like other budgeting systems, you decide how much you allot to rent, savings, eating out, etc, and fill the envelopes with those amounts of cash. You may just find it more difficult to spend cash in hand, opposed to swiping a card.

6. Write Your Budget in Advance

Writing your budget in advance will give you the feeling of control over your finances. Instead of reacting when unexpected expenses inevitably come up, anticipate and make necessary adjustments. 

In time, you will progress from writing budgets monthly, to several months at a time, to the entire year. This sets the stage for retirement and estate planning as well.

7. Define Big Goals for the Year

We all have a vision of our future and milestones we would like to achieve. Paying off student loans, buying an engagement ring with credit jewelers, or taking a trip abroad are a few big ones.

The best way to realize these dreams is to incorporate such goals into your monthly budget. Whether you have $50, $100, or $500 to put away, stick with it–you might be surprised how quickly you reach the goal. W

8. Prepare for Holidays and the Unexpected

Life has its surprises no matter how much we plan. Even the holidays can sneak up, causing us to scramble and panic to find the money for trips or gifts.

When you map out your budget, you may find setting aside a dedicated amount for emergencies and holidays will smooth out some of the bumps along the road. 

9. Stick With It

One of the hardest parts of budgeting is sticking to the plan, it is also the biggest reason we find it hard to keep our finances under control.

Obviously, we are all human and need to enjoy ourselves–so build in some flexibility for fun and splurges. But the best way to achieve your big financial goals is to find a system that works for you and stay the course.

10. Prioritize Paying Down Debt

Debt is one of the biggest obstacles to creating savings and reaching financial goals. Among the biggest culprits is credit card debt. With some interest rates in the double-digits, you can find yourself spending hundreds of dollars extra to pay off impulse buys.

Pay down all your debt as quickly as possible, whether with credit jewelers or your local bank. Start with the highest interest-rate debt you have. Once you pay that off, move on to the debt with the next highest interest rate. You will be relieved to become debt free and can redirect that money to other life goals. 

Financially Thrive in the New Year

Budgeting doesn’t need to be a bad word. Yes, it takes some discipline and some work to get started, but it pays off in the end. A bit of work on your budget to start your New Year will reduce stress and let you enjoy life to the fullest.


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