Building a Better Budget for the New Year
Brought to you by Your Money Line
As we begin the new year, it’s natural to seek fresh starts and improvements in various aspects of our lives. You might have goals to improve your physical health, to finally pick up that hobby you’re interested in, or to spend more quality time with family or friends. Among the most common resolutions people make is improving our financial stability and confidence. While a worthwhile effort, there’s a catch – there is no one-size-fits-all approach to budgeting. So this year, as we kick off our New Year’s Resolutions, let’s explore how diverse budgeting strategies can lead to a financially healthier you.
Personal finance is as varied as the individuals managing it. Whether you’re a recent graduate starting a new career, a family planning for your children’s education, or you are simply approaching retirement, your financial strategy should reflect your journey. For example, the concept of money scripts (or our subconscious beliefs about money) dramatically influences how we handle our finances. Understanding these scripts is critical to developing a budgeting approach that resonates with you and your cultural/familial background. So, how do we navigate the plethora of budgeting advice available?
Start by acknowledging your financial goals and circumstances. Our financial goals, just like us, can be vastly different. Are you aiming to increase retirement savings? Do you want to reduce debt or save for a major purchase? Even if it is learning to manage daily expenses more effectively, this is a launching point to explore different strategies for budgeting. Here are three strategies to consider:
- A zero-balance budget
Ideal for the most meticulous of planners. This method involves assigning every dollar of your income for a specific purpose. Consider adding a savings category that allows you to contribute more to your retirement plans or a savings account like the Benefit Accumulation Account.
- Cash and carry
Perfect for those who want to curb overspending, this method uses cash for different spending categories making it harder to spend over the cash amount you’ve allotted. A debit card works with this method as well.
- The lazy man’s budget
Like the zero-balance budget, the lazy man’s budget starts by assigning dollars to specific goals. It is intended to make sure you’re covering your bills and growing your savings. However, the dollars available after your goals are funded can be used at your discretion. You are free to spend the discretionary dollars on things such as dining out with friends or going to the movies.
Let this New Year be a springboard for not just any financial change, but the right change for you. Embrace the diversity in financial planning, understanding that your journey is uniquely yours. As you explore different budgeting strategies, remember that the goal is to manage your money better and align your financial habits with your life’s goals and dreams. Here’s to a prosperous and personalized financial New Year!
Gifts by generous donors to Ministerial Relief and Assistance (MRA) make programs like Your Money Line possible. Learn more about MRA here.