As we approach the new year, it may be a good time to start thinking about how you want to budget your money. Many people are reconsidering their budget to prevent overspending during the holidays, but why stop there? It doesn’t hurt to look further ahead and prepare for the long run. Not only can this impact your spending, but also your ability to save, make large purchases, expand your business, travel, and more. By having a roadmap to project income and guide spending, you can make certain that your small business and/or personal finances are in order.  Here are some helpful tips to consider as you plan for the coming year. 

1. Review Your 2019 Budget

In order to figure out where you want to go in 2020, you need to review where you’ve been. By now, you should have a pretty good idea about which goals you are going to meet this year and which ones will fall short. Knowing this information will help you decide if you need to reduce spending, increase your savings, or adjust in some other way. To make things easier, you can ask yourself questions such as:

• How much did I spend each month on necessities vs. wants? 
• Where are the obvious places I am overspending?
• What do my savings look like in relation to my spending?

2. Set Clear, Attainable Goals

It is good to have an idea of what you want to achieve in a specific time frame, but don’t be too hard on yourself. You don’t want to be disappointed if you fall short, so be sure to set goals that are flexible. A year is a substantial amount of time to make progress toward ─ or complete ─ many goals.  For example, you may decide to accelerate your savings in order to meet a down payment goal for a new home. 

3. Build in Room for Unexpected Costs

Unexpected fees and costs can take a toll on your budget and cause you to lose control of your money. Don’t let this be you in 2020. When planning for next year’s budget, build in emergency funds. If you are running a business, consider what might happen if you have an equipment malfunction or an increase in rent. You can always make adjustments down the line if everything goes as planned. It is always better to be safe than sorry.

4. Check Your Credit Score and Credit Report

Your credit score affects your ability to apply for credit cards, get approval on loans, etc. A bad credit score can ruin your budget, preventing you from getting credit and causing your interest rates to go up. It is also essential to consistently check your credit report in case of fraudulent activity. Identity thieves can open new accounts in your name and rack up unpaid bills, which can be detrimental to your credit score. 

5. Write Everything Down

Money can be overwhelming and difficult to keep track of. Writing everything down will prevent panic when you start overthinking your financial obligations. You may want to consider using an Excel sheet to track spending and saving. You can refer back to it whenever you need and it will keep you organized as the year goes on. Nobody likes uncertainty, so take this simple step to avoid it. 

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