Take a look back at your spending from last year, learn where you can improve, and make changes to set yourself up for a more intentional financial future. This article offers simple next steps to help you organize and save for goals.

Step 1: Compile your financial information

You’ll need access to your income statements, both from your job and any investment income you earned this year. You’ll also want to compile your expenses, which can likely be found on your credit card and bank account statements.

Step 2: Create expense categories

Categorizing your expenses will help you get a holistic picture of your spending habits. Create expense categories that are helpful for you. If you want to take your budget to another level, create sub-categories to get an even more detailed view of your spending. Sub-categories could look like this:

Home Expenses

• Mortgage

• Electricity

• Internet

• Gas

• Home improvements

Make as few or as many categories as you need for your budget.

Step 3: Categorize and analyze your transactions

Once everything is categorized, you can see spending totals for each category. If you take a step back, your previous spending should give you a sense of how you’re using money and whether you’re saving as much as you thought. If you’re an advanced budgeter, try to visualize your budget in a new way by creating graphs and charts.

Step 4: Set goals

For some, saving and investing 10% of their income is a great goal. Look at your budget and spending to see where you think you could set micro-goals, like reducing your spending on certain items. Savings goals can be a part of budgeting. Zooming out, a down payment on a home, saving for a vacation, or buying a vehicle are all bigger-ticket (macro-goal) items people save for.

Step 5: Take action

Once you have set goals, consider what actions you can take to achieve them.
The format might look like this:

Step 6: Check-in monthly

Once you start taking action to change your spending habits, you may see some changes to your financial well-being. At this point, it can help to check-in on your budget monthly. This will provide you with insights on whether you’re creating real change and motivate you to continue forward.

Make the most out of your budget

Your budget is a key tool for your financial planning toolkit. By understanding where you’re using money, you may find opportunities to align your spending with your goals. Do yourself a favor and go over your budget. Your future self will thank you.

Feeling inspired? Reach out to us directly to start a conversation about financial planning.

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