How to Budget for the New Year

Each new Year many people that would be successful in business or their personal lives get surprised because they did not budget or have a plan for success. Yogi Berra once remarked, “If you don’t know where you are going, you might wind up someplace else.” Here are six steps to point you in the right direction. Ready, Set, Read...

Instructions

Difficulty: Moderately Challenging

1. Review what you did wrong in prior year or years. Collect your data. See where your money went and how much was spent on "surprises". Begin to see if you have obstacles that you need to overcome. Do you have weaknesses, failure to plan, mishandling funds, etc. Devise how you will avoid any pitfalls.
2. Develop Reasonable assumptions. We can never know all that will occur in the coming year or months. But History has a way of repeating itself if we do not learn from our own mistakes. Also talk with others and learn from their mistakes. You can learn lessons even if you have not lived the mistake.
   
   Trust personal experience and seek advice from someone who is achieving they success you are looking to have. Determine what things could pop up and how to resolve them quickly. Planning is key.
3. Determine expected revenues. Make sure you know where your money is coming from and how to distribute it once you get it. this is not counting your chicks before they hatch. This is knowing that you will get paid every other Friday and that your savings has 4.59% interest rate. This should be tangible money.
   
   Yes, in our current economy, lay offs and termination are the norm but unless you have prior news of this. You have to believe that your job will be there, however, you should have in step two planned for "surprises".
4. Expect certain costs. If you know that you buy Christmas gifts for your parents and they live in another state. You automatically know that you will have to pay for the shipping of the gifts. Budget this cost in. The same for Mother's day and Father's day.
   
   The more you are aware of little costs and have planned for them you will see much of the stress you feel during these times. This is true for any cost that is attached to projects, plans and etc. Plan for them and budget them in.
5. Calculate your Living Costs. In our society, many people are not able to live and maintain their lifestyles because they have not factored in what their lifestyle actually cost.
   
   Paying mortgages, buying food, paying utilities and the rest can get very expensive. Take your receipts from last year and figure out what will be needed to maintain the lifestyle you currently have and research to see if increases are coming up in the near future.
6. Set yourself up to receive income from sources like eHow and others that pay you for your expertise. By having a few dollars coming in addition to what you have on a steady basis can only enhance you and make things easier.

Tips & Warnings

• Pay bills as they come up
• Keep your budget and DO NOT deviate.
• DO not live above your means
• Watch your credit