A New Year Means a New Start and a New Budget!
There's something that feels inherently fresh about a new year, no? A new beginning, a chance to start over and reset the clock. While we can't leave everything in the past, there is a certainly a lot to look forward to this year. I've been seeing a huge influx in downloads for our free budget spreadsheet lately. Like at a rate of four times normal. That's a lot! As I was wondering why, the first paragraph of this post came to mind.
It's a fresh start and we're all trying to resolve to make 2014 an awesome year. And what better way than getting your finances in order?
I'd like to share some thoughts and tips that we have implemented into our budget as we planned out our year using our eBook The Family Playbook as a guide.
Take the Long View First
We budget on a monthly basis, but before each year we also take a step back and attempt to budget for all the major expenses we have coming up. You may have seen this in Kelsey's recent post about our 2014 financial forecast.
We list out all of the big things we want to do in the coming year - the things that are not always on our monthly budget - and how much they'll cost. Then we divide the total by the number of months we need have until we need the money, and save monthly for it until it's time to spend it.
It takes some discipline, but it's totally worth it. When it comes time for that vacation this summer, we don't have to worry about spending money we don't really have. We've already saved for it and we get to spend it, guilt-free.
Think Before You Spend
One of the best ways to meet your financial goals quicker is to think differently about the extra scratch you may have coming to you.
For example: Did you get a tax refund last year? What did you do with that money?
Tax refunds, bonuses, raises and extra paychecks can all be great tools to help you achieve your financial goals for the year.
We typically use this extra influx in cash to fund our irregular expenses for the year (again, see our 2014 financial forecast for examples).
We used to just spend that money on whatever felt good in the moment. But by delaying the gratification, we're putting our money toward things we've intentionally thought through and know we are going to have to save for anyway.
And with where we are in our financial journey (no debt, six-month emergency fund, funding retirement and college accounts) we can then use any extra money throughout the year to save for fun things... like finishing our basement.
It all comes back to thinking long-term. On the surface it might seem difficult to think about budgeting and spending our money this way, but once we have our goal of where we want to be and it's important enough to us, it's a heck of a lot easier to stick to our plan.
We know this too well from experience. It's taken us a few years to figure out. Even while we stick to a budget every month, it's so easy to unintentionally increase our budget when we have an extra chunk of income slide our way, but when we make a plan ahead of time for how we might spend the tax return (should we get one), it's so much easier to follow through.
Bottom line: Spend your money however you want, just make sure you're spending it intentionally. As long as you've decided ahead of time how to spend it, there's no guilt.
It might be a few months away, but how do you plan to spend your tax refund money?(if you'll be getting one) Leave a comment below!