Give up chocolate. Give up smoking. Exercise more. Join a gym. How many times have you made a New Year’s resolution that you actually kept past Valentine’s Day? But this year we’ve got a New Year’s resolution that is not only pretty easy to keep, but that will make a huge difference to your bank account.
Wait for it…
Making a budget.
OK – we know that it sounds a bit boring, a bit tedious and a bit daunting, but bear with us.
A budget can make a huge difference to your life, to your bank account and – importantly – to your stress levels. Do you ever get to the end of the month and have to grimace when you use your card? Does it get a bit touch and go as you get closer to payday? After all, bills, children and travel aren’t cheap – and it can be incredibly stressful to have that end-of-month panic.
A budget – although it sounds a little dull – is the answer to this. In fact, using a budget might help you make your money go further – you might even be able to start saving (or increase the amount you’re already tucking away).
Your New Year’s Resolution 2017
However boring it sounds, deciding to start budgeting is a great New Year’s Resolution. Hear us out:
Not only does making a budget help you keep an eye on where money is going, know when money is coming out, tuck away money for a rainy day and spot potential bumps in the road, it also helps you make extra money.
Not only do you make extra money by spotting areas you can cut back (but, equally, areas you can afford to spend more) but you’ll also build up a good idea of how much interest you’re paying on certain loans and how much you’re forking out for late payments and bank charges. Once you know about these, you can work around them and cut them out as soon as possible.
How do you create a budget?
Well, there are two ways of doing it: the old-fashioned way or the new way. Each are equally effective, but one is significantly easier and more convenient.
The old way involves all of your old bills, pens, paper, calculators and lots of head scratching – you sit down and scrutinise your finances, making a list of what is going into your account, what is going out and where you’re spending money. You work out how much you spend on categories every month (food, travel, leisure, bills, rent…) and whether you can cut back. You also look at outstanding debt and charges each month. From that, you work out how to use your money every month so that you’re not in trouble.
Which is great – but there’s an easier way. A much easier way, in fact. (Isn’t a New Year’s Resolution always much easier to keep if it’s easy to do?)
We’ve put together a guide to the best free money management apps before, but we’ll save you some time. The one we recommend is OnTrees Personal Finance: The Money Supermarket Spending Tracker (available for Android and iOS.) Not only does the app lets you see, at a glance, how much money is coming in and going out (as well as a complete breakdown of how much you’re spending on bills, leisure activities and travel) but it also lays it out in a really easy-to-understand way – no head scratching and pouring over spreadsheets needed.
The information is incredibly easy to input too. In fact, everything about this app has been designed to help you start making informed decisions about where and how to save money.
And, as it’s free, there’s no reason not to give it a shot in 2017 – your bank account – and stress levels – might thank you.
What’s your New Year’s resolution? Are you planning to start budgeting? Or, if you’ve already started, have you got any tips for your fellow budgeters?