New Year, Fresh Start
Updated: Jan 22, 2022
The new year has begun and it's time to start planning! Planning your year is a great way to stay on top of your finances. It allows you to stay ahead of your expenses instead of letting them sneak up on you throughout your year. Continue reading to learn how!
How to "Plan Your Year" Step 1. List out Expenses Start out by listing each month of the year. Under each month, write down the expenses that you know will occur that month that aren't a normal monthly budget item. Do you know when your property tax bill is due? Remember when all those annual subscriptions are? What about birthdays, anniversaries, and quarterly tax payments? Finally you can have a place where everything is listed out instead of just in your head.
Step 2. Sinking Fund Once you list out all your non-monthly expenses, now step back and see if any of these can be in a sinking fund. A sinking fund can be a line item on your budget where it splits an expense over a period of time instead of it being a one-time expense.
For example, my annual auto insurance renewal could be a sinking fund. Instead of just paying that big bill all at once, I could add a monthly budget category for it every month. Take your bill divide it by 12 and voila! By the time that bill comes around you have it ready to go sitting in your bank account. Step 3. Goals
The next step to planning your year is to set and write down your savings or debt payoff goals. What’s left after your planned expenses? Where do you want to put that extra money? Maybe you can start that emergency fund? Or what about tackling that debt balance this year? When setting your goals, challenge yourself, but be realistic. Step 4. Review!
That's it! You’ve planned your year. Now don’t forget to refer to this! When making your monthly budget throughout the year, look at your plan and see what expenses you should add in. Are you ready to go plan your year?? It is the perfect time to do it. You might forget an expense when you first sit down, but that’s OK! Add it now, and next year, it’ll be spot on. And don’t forget to keep updating it as new expenses come up. You got this! This year is going to be different!