January can often be a time when many people choose to make changes in their lives to help start their year. Indeed, a common New Year’s resolution is to save money with a specific end goal in mind. Whether it’s saving for a security deposit or a vacation abroad, budgeting can help you reach your goal. However, it can often be difficult to keep your commitment – so what’s the best advice to help you create a practical monthly budget in 2022?
Makala Green is a licensed financial expert who has extensive experience in personal finance.
She thinks that while budgeting may seem like a “huge task” at first, it will eventually help you achieve your financial goals.
Speaking to Express.co.uk, she revealed her top tips for anyone looking to create a realistic monthly budget for the New Year.
1.) Don’t let excuses get in the way
One of the first hurdles many people face when it comes to budgeting is not letting excuses deter them from getting started.
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To avoid this, Ms Green says you just need to “bust the myth” that you don’t have enough free time to focus on your finances.
She said: “Sometimes it’s hard to do that New Year’s spring cleaning and it’s hard to get back to work, but once you set yourself a budget it’s so much easier to manage.
“Once that’s been done, all that’s left to do is make minor changes as needed. So it’s more start-up than anything else.
2.) Get a spreadsheet
Ms Green says she loves nothing more than managing her finances using a good old-fashioned spreadsheet because that way ‘nothing is missing’.
“That way it’s very clear that everything you spend there is okay and it also ensures that all your bills are also paid on time.”
4.) Create a specific goal
Giving yourself a specific goal to achieve rather than a vague goal can help you maintain focus and motivation.
Ms Green says “the more specific you are about your goals the better” because you are less likely to break away from a commitment.
5.) Allocate money for emergencies
Life can often present unexpected challenges that force people to compensate and therefore drift completely away from their financial goals.
To avoid falling into this trap, Ms Green advises people to set aside a certain amount of money each month to cover emergency funds.
She said: “Each month you can try to build a pot so that if you have unexpected expenses you can always go into your savings pot rather than affecting your budget.”