By ISEGHE AJAYI

With the prices of commodities skyrocketing each passing day, it is quite true that adhering to one’s budget especially in this unfavorable economy may not be feasible any more, owing to the soaring inflation.

However, a spending plan will certainly help you to manage your income prudently, while keeping track on your expenses to avoid being plunged into debts as the economy daily becomes unfriendly and until the government successfully tames the roaring inflation.

In a matter of hours, the year 2023 will roll away, giving way to a brand new year. It is, therefore, important to take a cursory look on your current budget to actually know how you fared, especially in the area of personal finance management.

Besides, if in the process of reviewing your operating cost for the period you realize that you have surpassed your budget for the year 2023, even with few days to round up, there is need to plan ahead for the coming year by attempting to fashion a more realistic budget.

The budget should, in particular take into cognizance the present economic situation, which may become worse, unless the country is able to stabilise its currency- the Naira.

It is no news that the bulk of the inflation in Nigeria today is imported, due to the massive devaluation of the Naira which continues due to the national penchant for imported goods, even those that can be produced within the domestic economy.

Also, having a spending plan will help you see the need to enhance your earnings, especially if there is an opportunity for foreign exchange so as to beat inflation and in the process enhances your savings.

In summary, it is expedient that you start the New Year on a proper financial footing by evaluating your previous budget as truthfully as possible to help you avoid pitfalls and create a more practical one. This will keep you on track to reach your financial goals in the New Year.

The beginning of the year is the perfect occasion to execute a new budgeting strategy that suits your current standard of living and to surmount all financial challenges that would come your way.

The following tips will aid you to create your best budget and start off 2024 with financial assurance.

Evaluate Your Total Earnings

You need to look over the past year’s bank statements to evaluate your total gross income from all your revenue streams.

This enables you to know how you spent money in the outgoing year and determine what you must determine to expunge at all cost, or what may not be necessary going forward.

Also, take a few minutes to ponder on anything that may have changed your income pattern this year such as getting a raise or switching jobs. Be sure to also include income from any part-time positions or side hustles as well.

Prioritise Your Needs

Write down all your reoccurring monthly financial obligations with their amounts, such as rent, car and other miscellaneous expenses.

Then, move on to more fluid expenses like food, entertainment, utilities, and gas. Include insurance, maintenance allowances for parents/siblings, transportation, educational expenses for children/wards/dependants, medical bills, toiletries, hairdressing/cuts and sundries on this list as well.

Now look at this list and consider getting rid of what you do not need, or those that have cheaper alternatives, if such cannot be totally avoided. Cutting out these expenses will help you save a little extra in the medium to long term.

Be Specific About Your Goals.

Be as specific as possible about your financial goals for the New Year.

Do you want to set aside money for a vacation fund? Save for a new home purchase? Create an emergency fund? Or maybe you have goals that relate to spending less, dining out less, buying fewer luxuries.

Write down a list of your top five goals that will make you feel more confident about your financial situation by this time next year.

Be specific with the amount of income expected and also how to expend it such that you are able to set a deadline of when you expect to reach your goal as it is much easier to save if you have these specifics in mind.

Regulate Your Budget

Subtract your monthly gross income from your monthly expenses to know how to adjust your budget if need be.

Also, such will help you know if your expenses are more than your actual income.

Do you have enough cash flow left for taxes and savings? If you are looking at a negative number, remember it is never too late to change bad habits. Instead of concentrating on what you have done wrong, focus on what you can do to improve.

Ensure Your Budget is Practical

Now that you have put down or known where your income sources, what you spend on, and what you need to do to improve on you’re spending and savings habits, only then are you ready to put together your budget.

However, if you need to alter your expenses, figure out what you can afford to remove or lower in order to reach your financial goals and you may even reflect on finding ways to increase your income like a part-time job or a hobby you can make money from.

Write a realistic budget next to your current spending habits, so you are able to easily see the changes you need to make and hold yourself accountable by setting a resolution with completion dates.

Review And Revise Your Budget

No matter how good your budget looks on paper, it is insignificant unless executed on a consistent basis.

Rather than give up completely when an unexpected expense head throws off your budget, ensure you have set at least an hour aside each month to review and revise your plan in the case of any surprise expense.

Also, during this time, you will want to plan out how you will get used to your budget based on the circumstances while still being consistent with your savings.

Prepare a debt payoff strategy

If one of your financial goals for the year is to get a better handle on debt, put together a debt payoff approach that complements your budget.

Still, you need to choose a debt payoff amount that will help you get ahead financially by the end of the year. It must also be one that will not overstretch you financially, even as you must be realistic about how much you can set aside to pay down your debt, and include those amounts in the expenses column of your budget.

Stay On Track With Your Savings Goal

It will do you real good to automate your contributions each month such that a fixed amount of your monthly income goes directly to your savings as this will make it easier to stay on track with your savings goal.

If your bank offers the option to separate your savings account into several categories, you can designate each account for a specific goal, such as a vacation fund, emergency fund and even car repairs.

Separating your savings accounts this way can make it easier to see how close you are to your goal each month.

Stay on top in year 2024 as you review your past budgets! (Daily Independent)

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