New(ish) Year, new budget! Now that you’ve paid your credit card bills from the busy holiday season, it’s the perfect time to review your cash-flow plan and get set for the year. Whether you’ve got time for some quick fixes that will help throughout the rest of the year or your budget is in need of a bit more of an overhaul, get ready to create a cash-flow plan that works for you!

What Can You Do Once a Year to Improve Your Cash Flow?

Not everything requires a monthly review, and a one-time-per-year check on the following items can enhance your cash flow year-round.

• Review subscriptions and cancel those you no longer use.
• Check on offerings from your cell phone, internet, cable, and similar providers to see if a lower-cost plan would be beneficial.
• Look at other ways to be more conscious in your consumption.

It’s also a good time to get real about larger purchases and goals for this year. That way, you can make your budget workable.

• Adjust your cash-flow plan for annual goals, like vacation, based on your actual spending from last year.
• Prepare for any new goals you have in your financial plan for this year by adding them into your cash-flow plan.
• Check out averages for each spending category, and make them match reality, too.

Don’t forget about setting up your savings plan, especially if you need to refill your EFOF!

How Can You Make a Budget That Works?

With your averages set, check on the categories that don’t align with what you thought you were spending. There’s no need to focus on the categories that do match your expectations, unless you’d like to make changes. Focus your valuable time and effort on the changes you’d like to see. 

For example, do you value brunches with friends on the weekends … but see that you spent less in your dining out budget than you’d planned? Perhaps you’ll review your calendar and ensure that you’ve got at least one meal with friends scheduled each week — and stick to it.

Or maybe you drastically overspent on your dining out budget and underspent on groceries. If you’ve already got one meal scheduled for this week and another friend invites you to join them, you might see if the following week works for them instead.

Reviewing categories from a financially adjacent perspective — like your social calendar — can inform you of the behavioral changes you’d like to make throughout the rest of the year. This way, you can make your lifestyle work with your budget, and you don’t have to feel like you’re missing out.

How Can You Set Your Budget Now to Make It Easier to Manage All Year?

One trick I like to use is to move my budget categories up or down within their budget groups. Have expenses that are the same every month? They go to the bottom of the list, and I mostly ignore them. For you, they might include the new subscription amount you expect now that you’ve culled the services you no longer use. Your phone bill, utilities, as well as cable and/or internet could land toward the bottom, too.

The secret to learning how to stick to a budget isn’t just about the numbers; it’s about keeping your most “active” expenses top of mind: The top spots should go to the items that you’re actively watching. For me, these are dining out and groceries, so I can balance the two. Rank your categories by those you need to watch toward the top, in order of importance. Their spots at the top of the list can help keep them top of mind — and improve the likelihood that you’ll stick to the new goals you set.

Looking for an even easier way to make a manageable budget? Separate your expenses into those that are set and those that are flexible. Other than once-per-year improvements, you probably can’t do much about the set costs. But you could set an amount to stick to in the flexible amount. No matter how your spending changes by category from month to month, if you stick to a total goal for the flexible side, you can still come out ahead.

How Often Should You Review Your Budget?

You don’t have to review your transactions every day or every few days as I do! Once a week is fine for most people. This is because recent transactions are fresh in your mind, and you don’t have to rack your brain to remember what each was. If you spend less often, every other week is great, but I wouldn’t recommend waiting longer to properly categorize your transactions.

A full budget review at the end of each month is also a great habit to get into. It’s a way to notice larger trends — as opposed to individual transactions. If you’re still struggling with the specifics of how to stick to a budget that matches your lifestyle, feel free to schedule with me! As you settle in, you won’t need quite as much support, but I’m always happy to help.