It has been long proven that one of the keys to success is preparation. If at this point, you are not fully prepared, no need to panic, you still have some time to get going. Here are some tips on how to put together a budget and stay on track in the new year.

“By failing to prepare, you are preparing to fail” – Benjamin Franklin

Budgeting goals

Create an overall financial goal for the current year. It could be to save 20% of your salary or take your family on a vacation. Maybe, you want to save for a deposit on a home, get out of debt or just to have better control of your finances. Setting a budget for the year and holding yourself accountable is the best way to achieve those objectives.

How to create a realistic budget

1. Determine your currently monthly income and expense
2. Quantify your additional yearly expenses for example insurance, annual holiday, house maintenance, special occasions (Christmas), gifts  
3. Set an emergency fund amount to take care of those expenses that are sure to opo up
4. Quantify and set your finance goals (save $20k, invest $5k)
5. Adjust as necessary

Budgeting questions and answers

What if I don’t know what my revenue will be as I am self employed, currently unemployed or work by commission?

Start with your expenses as you can use past data to compile, then contemplate on the life you want to live. Do you want to take a family holiday, a personal development class, enjoy a monthly meal out? Use those expenses as your base point. 

Based on this information, you will then see how much revenue you need to earn to accomplish that. Flag those expenses that you will not commit to, unless you have earned that revenue (those are your variable expenses). In others words, do not spend outside of basic living expenses unless you have earned.

How to create a budget when I do not know my current expenses?

Examine your bank and credit card statements for the last six (6) months and this should give a starting point for what you are spending. Use a budget template to get an idea of the basic categories you are seeking the data for. 

Update the template as you gain more reliable information. It may take some time before you have a realistic budget but in time it will be more and more accurate.

Budgeting for one off expenses

Take the total and allocate over the full twelve month period, that would ensure the amount is factored into the total yearly budget. 

Another method would be to allocate the cost to the month in which it will be incurred, that is the car insurance is due in September, the total expense goes in the month of September. The last method helps with cash flow projections.

Tips to managing a budget

1. A budget is a working document and you will need to update as more reliable information comes to hand. 
2. Monitor your cash purchases as it’s harder to capture those expenses.
3. You will need to formulate a process to capture your actual expenses. This can be done by using a budget template and save as an actual version or you can download an app to help.

Summary

If you are new to budgeting it can disheartening at times. Remember, it is not meant to be a restrictive process but a tool to keep you in control of your finances. You get good at budgeting and managing your monies, by starting.

Here are tips on how to live frugally with sacrificing https://livingloudonabudget.com/frugal-living-how-to-save-money-and-live-better-without-sacrifice/

Book a discovery call to discuss how we can help you on your financial journey https://calendly.com/tanja-livingloud/30min?month=2025-10