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Take Control of Your Personal Economy With a New Year’s Budget

When you make your New Year’s resolutions, consider creating a family budget as one of the things you intend to do in 2019. A budget is essential to help strengthen your family’s personal economy.

Helps you gain understanding

If you’ve ever thrown up your hands and said “I just don’t know where all our money goes,” you’ll probably benefit by creating a family budget. The first step in controlling your personal economy is to understand what factors affect it most, and a budget will help you do that. Creating a budget helps you identify where your family’s assets come from, how they are distributed and whether you are making progress toward your long-term goals and objectives.

Small purchases do add up and can effect your savings. For example, you might find that you’re spending much more than you thought on your daily lattes or your entertainment expenses. Or maybe you’ll discover just how big a bite high-interest credit card payments or loans are taking out of your monthly income. Conversely, you may be pleasantly surprised by how well you are managing your household budget and decide to buy that new pair of cufflinks you’ve been coveting . It may be that your personal economy is growing faster than you thought, enabling you to reach some financial goals earlier than planned or give you the freedom to increase your investments for the long term.

Prompts you to prioritize

As you review your income, expenses and financial goals, you’ll find that you may have to give some things up or reallocate your assets in order to gain traction against your goals. You can’t spend the same dollar twice, and a budget helps you prioritize what is most important within your personal economy. Would you rather eat out more often and buy season tickets for the local sports team or should you instead increase your investments in order to ensure more money for your retirement? Are you willing to take less exotic vacations to increase the assets you put away for your children’s education needs? If you don’t want to give up the “extras,” are you willing to look for a better-paying job or perhaps moonlight on the side to bring in additional income? Priorizing what is important to you will help you make the right decisions toward reaching your financial goals.

Increases control over your personal economy

Knowing where your money comes from and where it ultimately goes is essential to controlling your personal economy and your financial well being. You may realize that you’re saving less than you’d like each month and that you’re spending a considerable amount each month on expenses that are not easily recognized. In this case, establishing control by adopting a new budget may help you realize places where you can cut back to increase your savings and take advantage of other investment opportunities.

Strengthens your personal economy for the future

A budget not only helps you control your current financial picture, it also gives you a meaningful tool to plan for and achieve your future financial goals. Setting short- and long-term objectives and putting a price and time schedule on them, will give you a financial target at which to aim. Budgeting and making periodic investments over time, rather than just hoping you’ll come up with the money you need, gives you the power to achieve the financial goals you’ve set for your family.

Provides the motivation to succeed

By creating more awareness of your progress toward your financial goals, a budget provides you a strong motivation to succeed. Budgeting may seem like a nuisance at first. But if you stick with it, you’ll have a renewed interest in how you’re doing on a regular basis, and you’ll likely be more proactive in keeping your finances on track.

Get started now

The complexity of your budget will depend on the goals and objectives you have set for yourself and your family. However, the best budgets are often simple ones that family members can understand, discuss and revise with ease. In the past, many families may have decided that financial software packages such as Quicken or Microsoft Money were enough to help them create a budget. But with the complexities of today’s investment choices and the abundance of opportunities for building personal wealth, more robust tools may make better sense. A professional financial advisor is an excellent resource for helping you control your personal economy, so consider consulting with one for assistance in developing your financial plan . The earlier you review your financial situation the sooner you can start making progress toward your major financial goals. From there, it may just be a matter of sticking to your New Year’s resolution and updating your plans when necessary.

 

The views expressed represent the opinions of Benedetti, Gucer & Associates and are subject to change. These views are not intended as a forecast, a guarantee of future results, investment recommendation, or an offer to buy or sell any securities. The information provided is of a general nature and should not be construed as investment advice or to provide any investment, tax, financial or legal advice or service to any person.

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