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As the New Year approaches, we all look ahead and see a blank slate. No matter what happened in 2012, we know that we’re going to accomplish EVERYTHING in 2013. We’ve got big plans, big dreams, and the future looks so bright we need some flippin’ sweet shades! And as the year rolls around, we step out the front door, ready to take on the world. The only problem is…..we forgot to put on pants!
You Need A Plan
Many believe that success is sometimes a fluke, or a big break. You just end up in the right place at the right time, and everything just falls in to place. Even the media plays to this stereotype, calling people an “overnight success!” What they don’t talk about is the years and years of hard work and dedication put into being an overnight success.
I’ve seen over and over people taking on this same mentality with their finances. They feel like they just can’t get ahead, and if they “just got a raise”, or “just got that promotion”, they could finally succeed financially. With all due respect to anyone in that situation, I believe this is a complete load of crap! You have more control of your circumstances than you give yourself credit for, all you need to do is start making decisions today that will get you ahead tomorrow.
Specifically, what I’m talking about is putting together a sweet, sweet budget! Yes, budgets can be the object of your passion, and once you see what I’ve seen them do for people, you’ll start to “Heart Budgets” too! But how can they actually help you?
Here are 5 reasons to start a budget for 2013:
- You Don’t Know Where You Money Is Going. Now, I’m sure most people know which bills they pay each month, and possibly how much they’re spending in gas and other necessities, but a majority of people do not know where every dollar is going. What I have found is that most of the extra money disappears on unplanned discretionary purchases and food (including restaurants). And those extra, unplanned purchases can add up to hundreds, or even thousands of dollars a month. Putting a budget in place is a way to assign every dollar, and help you find
- You Didn’t Accomplish This Year’s Goals. This time last year, you were feeling exactly the same way. You had stars in your eyes and a list of New Year’s resolutions that you were going to accomplish. Then life happened, and many of those financial goals you were hoping to hit got put on hold, or maybe they just disappeared by the end of January. I know this, because it’s happened to me as well. Putting a budget together and planning your goals by using budgeting tools like savings buckets will virtually guarantee that you WILL hit your goals. It’s as easy as setting a goal, figuring out how long it will take to get there, and saving each month toward that goal.
- You Just Got A Raise. Year-end raises happen for most working professionals, so now’s the perfect time to plan where that money should go. Like I said above, many people just hope for a big break to help them get ahead. The problem is, even when you DO get that raise or promotion, it gets eaten up by lifestyle inflation, and most people aren’t able to fully utilize that extra money to help them get ahead. I suggest living on the same amount next year as you did this year, putting together a budget plan and setting up automatic savings at your bank to put that extra money toward one of your savings goals or retirement funds.
- You Didn’t Get A Raise. If you did not get a year-end raise this year, why not give yourself one? When Michelle and sat down and put together our first budget, we were surprised to see that we had more money than we originally thought. When we got married and moved out of town, we were able to survive on only $14 an hour because we had an awesome budget put together. We were living better on that money than when I made $17 an hour back home! Even though my income went down, I gave myself a raise by creating a budget and sticking to it.
- You Want To Have More Fun This Year! Yes, I know, when you think of fun, it’s more cotton candy, hot dogs, nachos, bacon burgers, popcorn (hmmm, note to self: don’t blog when hungry…) and roller coasters. When I think of having a fun time, I can’t separate it from putting together an awesome budget to ensure I have the most fun possible! If you really want to enjoy your vacations, outings, and parties in 2013, put together a budget, and don’t forget to plan in some fun. For us, we have a savings bucket for vacations and birthdays, which allows us to spend all that money guilt-free and fully enjoy each occasion. We also give ourselves spending cash each month to blow on whatever we want, like a Justin Bieber singing toothbrush (yes, we actually own one). The best events I’ve ever enjoyed were fully planned and funded ahead of time. You really can relax and enjoy yourself when you’re not worried about whether or not you can actually afford something.
So, have you put together a budget for 2013?
I just put together our FY13 budget. We’ve got it all mapped out on a master spreadsheet page that shows our whole year, and we (roughly) planned out each month’s expenses. It was super easy to put together, and we could see how much money we need each month, as well as set some goals for extra income so we can hit some more goals in 2013. Seeing everything on paper motivates me to not only stick to the budget, but to start finding ways to save and earn more each month. It gets me really excited for the possibilities of 2013!
If you haven’t setup your budget, or if it just seems too intimidating, feel free to contact me directly, and I can put together a budget for you as part of our Budget Friday series. I’ll even send you a personalized spreadsheet afterwards so you can start living out your budget plan! 2013 is going to be an exciting year, how are you planning to make the most of it?
58 thoughts on “5 Reasons To Start A Budget For 2013”
You know I’m a big advocate for budgets and any time is a good time to start one. The top time is in January for most as they like the “fresh start” just like those memberships to the gym. For all those people that think they can’t budget or they don’t make enough money to budget or that they have too much debt… it doesn’t matter. These reasons to start a budget should be more than enough for anyone to kick it into gear! Cheers mate. Mr.CBB
I hope more and more people do get on a budget. It really is a life-changer!
Just remember when you’re budgeting for 2013 that your paychecks will likely be smaller due to the expiring payroll tax cut (among other fiscal cliff problems). You can read more about it in my post about your paycheck shrinkage in 2013 🙂 https://www.moneymanifesto.com/
I know, I know. So lame-sauce. And this fiscal cliff problem is going to tick off a lot of my tax clients this year if they don’t get it sorted out!
This is a great reminder to me to update the budget for the new year. Although,it’s more of a planning phase. I like to make official changes after my performance appraisal in the Spring.
That said. You’ve definitely given me a lot to think about. Our finances have been stagnant since we dropped to a single income. I think it’s time to stop putting goals on hold and challenge myself to improve our family’s finances.
We’re in a similar place, where we dropped to a single income last December, and I’m really excited to get laser-focused this year and kock out some big goals.
Trying to plan out our budget as we speak! My husband’s paycheck is going from monthly, to twice a month and that is throwing a bit of a wrench into how I had it set up. Back to the drawing board 🙂
If you want to take the headache out of the “twice a month” paycheck, just get a month ahead. I wrote about it here:
I think my budget is gonna stay the same for the time being but I’ll definitely have to do some adjusting sometime near the summer as there will be a lot of changes happening for me then!
It’s nice to have a great routine where the new year just means another month. Sounds like you’ve got it down 🙂
Just got done showing Mr. PoP that if we have a similar year income-wise next year, we can conceivably pay off ALL of our remaining RE investment debt (except for the mortgage on our house) by 2014. Which is pretty friggin’ huge since that’ll be about $58K from where we are today.
WOOHOO! No more investment debt. $58 paid down in a year is RI-FRIGGIN-DICULOUS! Ya’ll rock!
Agreed to all of these points. Knowing where your money is going (or supposed to be going) is key to reaching goals. Unless of course you are putting those goals on credit.
NO PAYING INTEREST ON YOUR GOALS! 🙂
Ohhhhh snap, love the new logo!
We created our monthly budget to reflect our goals for 2013 but I don’t create a budget for the entire year in advance. I just create a template that’s based on a worst-case, 4-paycheck month and then modify that template for each month as I come to it.
Regardless of how it gets done, it is imperative that people make a budget!!
Thanks Jason! it’s an Andrea special logo.
I’m a planner aheader (is that even real?), so my master page on my spreadsheet shows all details for the whole year. It’s surprisingly easy to look at, and helps up budget for irregular expenses).
Nice post! Knowing where your money is going is paramount to being able to setup an accurate budget.
It’s sometimes a tough process to look at where the mone is going, but it’s the first step to financial freedom 🙂
#2 is so true. If you didn’t follow the budget this year, why would you try to keep the same budget for next year? Clearly something didn’t work. Great tips, budgeting has really changed the way I think I about money. And ditto with Jason, Love the logo/header!
Definition of insanity: doing the same junk and expecting different results. Let’s start this new year off with a sweet budget to get things rollig in the right direction 🙂
And thanks, I like the logo too 🙂
I would say the most important reason to budget is to build up savings. There are so many unexpected expenses (medical, auto, house/rent/moving, etc.) that make it very important to have some sort of savings plan. A budget can definitely help with that.
Yup! I’m all about savings buckets for those “unexpected” expenses 🙂
The beginning of the year is the best time to setup a budget or tweak it if you already have one. There is no better time than the present!
Yup! I like Jan. 1 because it helps me recap the previous year, and plan accordingly. Hoping to hit some big goals this year!
These are all good reasons, Jacob! The new year is a great time to get a new start on things! I hope you have a great 2013!
You as well. Thanks Holly! 🙂
As someone who used to believe in the theory of an overnight success and things just fall into place, I totally agree with your point. That belief system is a load of crap! If you want to be successful and win with your finances, you’ve got to make your own luck – and having a good budget plan in place is key. It’s so nice to have your budget work for you, so you can spend money on fun stuff, instead of just paying the bills. Yes, having a budget can be fun. 🙂
I’m all about having a blost on a budget. I firmly believe planned fun is way more fun! And it even allows for sponteniety, because you’ve already established a plan, so you can change it whenever you want. If you don’t have a plan, you can’t be spontaneous, because everything you do is a random guess…
Dude! I just read that the average person underestimates their budget by about $100 a week no matter how much money they make. You’re right: it’s the perfect time to start.
Wow, I totally believe it! Dude! WHOOOOAAA!!!
But seriously, we need a money plumber, because most wallets have a leak in them….
DANGIT! Already taken….
My spending has some leaks so I fall under #1. I’m sure that most of it is coming from cafeteria food and unplanned spending. I’ve already reduced my insurance payments and multimedia costs and can now focus on the variable expenses.
This coming year, I will be tracking my budget very carefully since I will have reduced income and increased expenses.
The discretionary categories will always get you, that’s where most of the money leaks come from. This happens in our budget as well. I don’t pay much attention to bills, but have my microscope focused on the food, date and spending cash categories (yes, I write very small…)
Great post! Knowing what to do with a raise is a great point that I hadn’t thought about. Also, loving the new logo!
Hey, thanks! 🙂 Me too.
And I hadn’t thought about the raise thing until recently, so I realized I need to direct that money toward goals, not lifestyle inflation.
Pretending like we never got raises is my #1 favorite way to save effortlessly. Last year we increased 401(k) contributions by the raise amount. And the year before that we set aside my husband’s raise for the kids’ college funds.
We just did it today. We’ll see how it goes…. 🙂
I enjoyed your article. Raise or no raise, we all need to budget are expenses. Individuals who do not budget are at risk of being unprepared for the future.
Yup, having a plan > no plan. Always…
what i am looking forward to, jacob, is to making our first zero-debt budget, where we get to decide where all of our money goes… we are only a few months away!
Isn’t it interesting that you lived better off of $14/hour than $17/hour. It’s amazing what you can do when you have to. I hope more people read this article.
Thanks! It was crazy, but it also helped me realize that anyone can improve their financial situation. Part of why I started this site!
I’ve always been a big proponent of budgeting, but I definitely let it slide this year. Our income has changed so much in the past year (in a good way), but I’ve let it affect what we spend, save, and invest (or rather, it HASN’T impacted what we save or invest, just what we spend, unfortunately).
This past year was one of transition for us, and our budgeting shifted a few times, but now that we’re locked in, I’m excited to make goals AND HIT THEM! 🙂
And I hear you on lifestyle inflation, happens to the best of us. At least you now realize it and are ready to make the changes necessary to make your money more powerful!
The increase in fun is the most convincing element in my mind.
A lot of the things that take up money are the things that aren’t memorable, and aren’t really much fun at all. Making a budget and small lifestyle changes so that you can have more fun, memorable moments doesn’t seem like much of a sacrifice at all!
Agreed! i love budgeting in spending cash and date money. If you don’t budget in money and time to create memories, but keep eating Taco bell, what does that say about your priorities?
Sexy new design Jake!
I got onto budgeting two years ago and haven’t looked back.
All five of your reasons are a solid reason to start a budget – no excuses!!
Nice post. Many people say they can’t save any money because they don’t have any to save. What they really mean is that they don’t know where there money is going. The first step toward saving is starting to track where every dollar goes.
These are five good reasons to come up with a budget. It is really necessary if you failed to accomplish many goals last year. We may be able to do better in 2013 with a budget in mind.
Budgets are definitely a life changer. My GDI partner knows that first hand and so do many of my friends. I have a family member that wants to run her household by a budget but her husband is a spender and doesn’t want to. Together they make over $200K a year but feel they live pay to pay. Fear is what prevents the hubby from doing it, yet he would be so liberated once they started. She is trying to do it on her own, but without the buy-in, it doesn’t work as well. Unfortunately I don’t believe they are alone and that a lot of people are scared to do a budget thinking they will be too confined and won’t have any fun any more. If they only knew…