Planning Your New Year Budget
- Jonda Beattie
- Jan 15
- 2 min read
Every new year I set up my budget for the upcoming year.
I have been doing this now for 37 years.
The first thing I do is calculate what I expect my income will be.
Every year is different. Life events are one reason this fluctuates. One year I retired and so was then looking at retirement income instead of a full salary. A couple of times I lost a husband due to death and had to figure out how much I lost in income by not having their share of household monies. One year I started my own business and another year Diane Quintana and I started up a business together. Last year Social Security started giving me a small check each month.
I look at all of this information and make my best estimate for expected monthly income.
The next step is to look at how much I spent in each of my categories last year.
Each week I enter into my paper ledger what I have spent that week. At the end of every month, I put the total for the month into a spreadsheet. At the end of the year, I total up each category and divide that total by 12 to get my monthly average.
I also scan the months to see if there was one month that was way off and note if this was just a once in a lifetime event or might repeat this coming year.
Working with this information, I put down what I expect my monthly spending estimate will be in each category.
I then total those estimates to make sure that they do not exceed my expected income.
I look over my goals for the year. This year I hope to travel more and do more fun activities. That means that I need to increase my spending in the entertainment category. That also means that I need to find a few categories that I can trim.
All of this is a challenge, but I am a creative person, and I am looking forward to this new year.
By having a budget plan in place, I am comfortable and not stressed about my money. I have done this for 37 years. I’m confident that it will work out this year.
If you need some help setting up a budget, jumpstarting a project or some guidance with time management, reach out and we can schedule a consultation.
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Jonda S. Beattie, Professional Organizer owner of Time Space Organization, and co-owner of Release, Repurpose, Reorganize. She is based in the Metro-Atlanta area. As presenter, award-winning author, as well as a retired special education teacher she uses her listening skills, problem solving skills, knowledge of different learning techniques, ADHD specialty, and paper management skills to help clients.
In my prior career, I had a strict budget (with a category for play money) and was always able to make wise, budget-related decisions because I had entirely predictable income every two weeks and mostly predictable expenses, notwithstanding the occasional car kerfuffle. (Flat tire? Dead radiator!) But I've found there's no predictability, either year-to-year (like January to January) or month-to-month, in my self-employed income. I've had years where my January was scheduled to be my biggest income month ever, but between flu (not my own, but everyone was getting it) and bad weather (so we had to stay off the streets), it ended up being my worst January ever. You're right that this can be a challenge! Expenses, at least, can…
This is good information! That fluctuation in income, especially for those of us who are self-employed, can be a real barrier to creating a budget, but you've explained very well how it can be done.
I am a big fan of budgets; I have been doing one for over 30 years. In January, I update the budget sheet with the monthly average from the prior year, since utilities and other expenses tend to increase and fluctuate throughout each year. I must do this for my business and our house. It gives me a better idea if we are on track, what we are saving for, what money we need for tasks over the year, and how much we will need. Thanks for sharing your process.
What a great discipline to have in place. It can be HARD to put together a budget, but I love that you talk about how to do it even in the midst of uncertainty. We won't ever know exactly what expenses are coming, but that doesn't mean we should avoid the process. Rather, this exercise helps us get more familiar with what we are actually spending, and where. It can be eye opening to look at it, and also so helpful to identify patterns of spending.
This is a great explanation of how to create a good workable budget.