Money Management

Five Budgeting Tips To Improve Your Personal Finances This Year

By  Karen Banes

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Whether you find budgeting a boring chore, or sexy as hell, there are a few ways you can make the process more rewarding.

Review first

Doing an annual review will help you prepare your budget for the coming year. While most people budget on a monthly basis, it’s important to remember that not all months are the same. Most of us have annual or quarterly expenses, so knowing what you’ve spent over the last year can be really helpful.

The money for those annual and quarterly expenses can still be set aside monthly. You just need a system in place to ensure that money is clearly allocated to a future expense. Seeing what your fixed and necessary expenses are, for the whole year, helps you allocate the right amount of money to them each month, and see more clearly how much disposable income you really have each month.

Budget as a team

Everyone who has the power to spend the money needs to be involved in the budget. So if you’re married, or part of a couple who share finances and expenses, you need to budget together or at least ‘in tandem’. What does that mean exactly? It means it’s fine to have your own money and run your own finances (yep, even if you’re married). But there will always be joint expenses and joint goals, that need you to cooperate and draw up at least some of your financial plans for the coming year together.

Create a value-based budget

Basing your budget around your values simply means you align what you spend your money on with what you actually value. This sounds like something most people would do automatically, right? Most of us don’t. Many of us value ‘giving back’ but take the attitude that we’ll give ‘what’s left’ rather than intentionally budgeting our giving. Some of us insist that we value family above all else, then don’t budget a single cent for a separate category that involves visiting distant family members. Then we complain at the end of the year that we didn’t ‘get to’ see family much this year. A value-based budget helps us allocate money to the things that make us happiest.

Budget around your goals

Budgeting around your goals is related to budgeting around your values, as values often inspire goals. But goals are more specific. If family is a value, then a trip to visit family in New York for a week this July is a goal. If giving is a value, then a commitment to give $50 a month to a specific charity is a goal.

Not all goals need to be noble or even value-based. Some can be pure fun. It’s been a challenging year for many, and not just financially. One of the things keeping many of us going right now is planning for a little fun in the future, no matter how uncertain that future may be. Setting goals, big and small, for the long and short term is a healthy way to give ourselves a boost. Working the financial aspects of those goals into our budget is a way to make sure they happen or at least remove one of the many obstacles that could crop up to stop them from happening.

Use the tools that suit you

Some people still budget on paper, and that’s fine. It really helps you see things clearly when it’s all laid out in a physical format. There are, however, plenty of online tools and apps that can really work for some people. Budgeting tools like EveryDollar, Mint, and PocketGuard can be invaluable.

Don’t look at budgeting as a chore. Look at it as a way to work out how to live your best life, on the money you have, whatever that happens to be right now.

Karen Banes

About the Author

Karen Banes

I’m a freelance writer specializing in online business, personal finance, travel and lifestyle. I also work as a content creator for hire, helping brands and businesses tell their stories, grow their audiences, and reach their ideal customers. I’ve lived, worked and studied in six countries, across three continents. Stop by my blog TheSavvySolopreneur.net to learn how to run your own (very) small business on your own terms. You can also connect with me at my website KarenBanes.com or follow me on Medium.com


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Disclaimer: In order to make Wealthtender free for our readers, we earn money from advertisers including financial professionals who pay to be featured on our platform. This creates a natural conflict of interest when we favor promotion of our clients over other professionals not featured on Wealthtender. Learn how we operate with integrity to earn your trust.

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