Be Budget Savvy in 2017

Becoming healthier is something lots of people strive for in the New Year. Attaining a leaner physique is a popular resolution, but don’t forget about your financial shape. That’s why we suggested last week that a slimmer, trimmer financial you can be achieved by taking the first step of tracking your spending habits.

Now it’s time to assess those habits in detail and then create a workable, realistic budget based on your findings. Of course, part of your budgeting process includes tallying up your income for the week or month. Once you’ve scrutinized both sides of the ledger, you’re ready to move forward.

Don’t make the mistake, however, of becoming too stingy with your funds. After all, you want to enjoy life while still living within your means. You can have both as long as you take a moderate approach.

Other things to consider when crafting your budget include:

  • Taking the money you save on trimming back on “wants” like daily specialty coffee treats or twice-weekly nights dining out and placing it in a savings account. Tip: use direct deposit to accomplish this goal. After all, if you don’t see the money you’re setting aside, you’ll be less inclined to miss it.
  • Paying down credit card debt. If you have multiple credit card balances, tackle the one with the highest interest rate first. It may mean paying the minimums on the other cards while diverting more funds to the one you have targeted. Once that balance is paid off, move onto the card with the next highest rate, and so on. Debt consolidation loans could also be helpful in managing your overall debt if the interest rate and payback terms are reasonable.
  • Using your debit card instead of credit card to pay for things like clothes, groceries and gas. This helps get you off the credit card/debit card merry-go-round, a ride that makes it too easy to spend beyond your means. Put aside a certain amount of money each month and spend only that.
  • Establishing an emergency fund. Experts recommend setting aside enough to cover 3 to 6 months’ worth of living expenses should something arise like loss of a job, an unexpected household repair, or an extended illness. Creating this fund may take some time if you’re faced with other expenses such as credit card debt. But even if you can only place some money in the fund every other week, it’s better than having no back-up fund at all. Setting up a savings account with small direct deposits or automatic transfers from your checking account is a good tip for building an emergency fund.  Make deposits your budget can handle each week or month and watch it grow.

Once your budget is established, don’t be afraid to make adjustments to it. You’ll probably need some time to tailor it to your needs and ensure it’s a healthier fit for your financial lifestyle.

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