Creating (and following) a budget is really more of a lifestyle than it is a New Year’s resolution… But in the spirit of the New Year (and fresh starts), let’s chat about what a successful 2022 budget looks like!
How to create a 2022 budget (using what you learned and spent in 2021)
Evaluate. Begin by reviewing expenditures from this past year. Download all your expense statements from 2021, if you haven’t already saved them somewhere. Reviewing actual expenses from the previous year will do two things for you. It will give you a realistic idea of what spending will look like this coming year, and help you to see where you strayed course on last year’s budget. We recommend breaking it down month by month. It is simpler and more effective to create your budget one month at a time, versus calculating a whole year.
Looking at last year’s budget, compared to expense statements, will give you an idea of how much you spent per month and allow you to evaluate what you did and didn’t use. For example, if you rarely use Hulu, but budgeted, and paid for it – cancel it! You’ll free up fresh funds for new adventures.
Record. Consider what would be the most effective tool for recording incoming and outgoing money. Some people do this with a notebook, some use spreadsheets and others use an app. There are a many cool budgeting apps available for free that help record.
Create strategy. Once you evaluate your expenses and pick the recording method, create a strategy that covers your needs and also affords as many of your wants as possible. Ideally, your budget covers your bills and expenses while leaving adequate room for emergencies and unexpected expenses. Don’t plan it out so specifically that it’s difficult to manage or hit your goals. Triple check that you’re including ALL of your expenses including emergencies, once-per-year expenses, debt program payments, taxes, changing gas prices, pet sitters, fun nights out, and SAVINGS (even if it’s only $10 per month). Investigate budgeting strategy (and mistakes to avoid)… or browse through our collection of personal finance blogs!
Take advantage of anything free. If one of your goals for the new year includes paying down debt, take advantage of our free debt review. A free debt review, as offered by Consumer Alliance Processing Company, will quickly analyze current financial statements and advise you on the least expensive, most effective debt repayment option!
The best 2022 budget will allow you to create, grow and explore our amazing world! Start by reviewing your budget, statements and lessons learned from last year. If budgeting is a new lifestyle for you, take advantage of our free debt review.