Atlantic Blog

Every new year is a chance at a fresh start. It's one of the reasons resolutions have become as popular as they have. That very first day of the year signifies a restart of sorts and the chance to change from the person we were the year prior. We can shed the baggage of who we were in hopes of improving or embracing an idealized version of ourselves. Resolutions represent those goals and ideals, a list that we set each year, and sometimes we reach them, and sometimes we don't.

Okay, in my case, I usually forget them after a month or so, but I'm trying to be better, and maybe you can too. I want to bike more, read more books, and write and create, and oh wow, where will I find the time for all those things? Maybe sleep is optional.

Most importantly, I want to make changes to my financial situation. It's important to remember that you have control over your finances and can make changes to improve that stressful facet of everyone's lives. 

One of my goals is to set a concrete budget that includes putting aside a little extra monthly money to offset the cost of future events throughout the year - everyone is getting married or having kids. Planning is rarely glamorous, but it can be a real lifesaver when it comes time to open your wallet. 

The Foundation of Every Budget

We've all done the mental math at some point about what percentage of our paycheck goes to expenses and how much is left over after necessities have been taken care of – crafting a budget is just taking things one step further.

The foundation of any successful budget is accuracy. Start by denoting how much money you make each month after taxes. Your income is the cap of your spending power for the year, so make sure to include any secondary sources of income! Primarily, you want to ensure that your budget doesn't exceed your level of money coming in and ideally leaves you enough wiggle room for any unexpected expenses like an emergency fund - which you can learn more about in our last blog, "Be Prepared, Not Scared: The Power of an Emergency Fund."

Finding The Necessities 

If you live in an apartment, you have to pay rent every month. If you own a home, you know exactly when the water bill will be due. After you've gathered how much money you make each month, it's time to denote every bill you need to pay – both monthly and quarterly. These are fixed, regularly recurring scheduled expenses – your car payments, WIFI, electricity, insurance, etc. The necessities of living in the 21st century.

Once you've gathered a comprehensive list of your regular bills, it's time to also consider fluctuating charges – things like your weekly groceries, transportation costs like gas, and other routine expenses whose prices will fluctuate depending on your needs or product prices.

What do you want, and what do you need?

Budgeting isn't about cutting out everything you love from your life but rather looking at what you can afford and embracing moderation. Takeout is a nice treat, especially after a long work day, but if you pay for food delivery every day, you'll rack up a lot of spending. 

It's important to consider what you need to buy and what you want to buy and strike a happy medium between the two. Optional purchases are just that, optional. Ask the important questions - do you really need a new cellphone every year, or would it be healthier for your budget to hold onto your current one a little longer? Big purchases should be considered ahead of time regarding your budgetary expenses.

Consider Your Debt

Incorporating your current debt into your budget for the new year and prioritizing paying off as much of it as you can, will set you on a path toward financial freedom. If you can minimize your outstanding debt over the next year, you can begin the year after with potentially more significant spending power. 

It might be time to consider looking at a Debt Consolidation Loan. Clean out those high-interest credit cards and opt for something manageable that will cut your stress in half. It can reduce multiple payments into one, improve your credit score, and make it easier for you to whittle down your debt.

Stick to the Plan!

If you put a budget together, it's only effective if you stick to it. Try to plan ahead and make any changes as they arise. I'm supposed to go to multiple weddings this year that will require travel, hotel expenses, and more – and working these into the budget for the months they're happening will hopefully make the entire ordeal less stressful. If you wait until the last minute and don't put aside extra money for these future expenses, you're just creating future financial woes when it's time to pay for that plane ticket.

We’re Here to Help!

Let’s make changes for the better! There are so many opportunities available to improve your financial situation as the ball drops. It doesn’t need to be a sacrifice; small changes can have a huge impact that can set you on a path toward financial stability.

When you’re ready to open a savings account, want to consolidate debts, or have questions on how to improve your financial situation, stop by any branch location or give us a call at 800-834-0432 to learn more about all the ways we can help.

Stay up to date and join our email list.

The Atlantic blog strives to deliver informative, relevant, and sometimes fun financial information. If you enjoyed this article, please forward it to a friend.

Each individual’s financial situation is unique and readers are encouraged to contact the Credit Union when seeking financial advice on the products and services discussed. This article is for educational purposes only; the authors assume no legal responsibility for the completeness or accuracy of the contents.