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The New Year is a fantastic time to set new financial goals. But don’t go nuts! Like any good goal, you want to ensure that your goals are first, somewhat realistic, and second, attainable. You may want to start with a large financial goal like buying a house, and then break that goal down into smaller, “steppingstone” goals that will get you to the larger goal.

One of the best “steppingstone” goals is budgeting. Financial-Savvy types consider budgeting one of the most important things you can learn to be financially successful. There are a lot of people who make a lot of money, but can never hold on to it because they don’t know how to manage their money. Setting up a budget for the first time can be intimidating, but don’t let this stop you. The following are a few great pointers on budgeting.

BUDGET TOGETHER – Budgeting doesn’t really work that well if you try to budget and your partner doesn’t. Financial goals and decisions should be made by all concerned.

GO A FULL YEAR – Whatever type of budget you set up, stick with it for a full year. You really can’t see significant change in only a month or two – real progress takes longer. If something isn’t working, adjust it, but push through until year-end.

REDUCE SPENDING – Try picking a few categories to reduce spending in for each month. Perhaps it’s taking a lunch to work instead of eating out each day, or giving up that cup of coffee that could magically save you as much as $11.75 a week, $47 a month, or $611 a year!

SAVE – Make sure there is a certain amount each month that goes to savings. Experts recommend that you have at least 3 months of income saved away for those unforeseeable situations.

THE ENVELOPE – For those who have a particularly difficult time budgeting, you may try the Envelope Budget. You take all the money you’ll need for the month in cash and stick it into envelopes labeled for each area of your budget. You then pay for the things you need from the correct envelope throughout the month. For example, if you budget $500 for groceries, you pay for your groceries during the month from that envelope. When there’s no more money in the envelope, you're done for the month (If possible, don’t bail yourself out - that’s cheating).

Good luck and have a very Prosperous New Year!

Disclaimer – I am not a financial advisor or qualified to give financial advice. This content is for informational purposes only and should not be construed as anything more.

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