Reach Your Financial Goals This Year
Whether your New Year's resolutions include paying down debt or saving more money, chances are your finances are involved. Financial resolutions are always at the top of the list, but just like any goal you can only reach it if you plan.
A budget is exactly that: a plan of how you will spend your money in 2020. Just by setting a budget and sticking to it, you'll find yourself well ahead of most other people – and on the road to success.
Basic Budget
In its most basic form, a budget should track all your income vs expenses for the year. But really seeing where your money is going can be difficult without a few categories to break down the expenses.
Make a list of your necessary expenses each month. Here are the most common ones to get you started:
- Rent or mortgage payment
- Utilities (hydro, water, heat, etc.)
- Cell phone & internet
- Groceries
- Transportation (car payment + gas or transit pass)
- Insurance
Be sure to include any debt repayment and some savings in these essentials.
Next, list your additional expenses each month. Some of these may be necessary for you, so move them into the appropriate list. Include costs such as:
- Take-out or restaurant meals
- Streaming services (Spotify, Netflix, etc.)
- Entertainment (movies, games, concerts, etc.)
- New clothes
- Gym membership
Remember to add a bit of contingency funds in case something unexpected happens – you need to take a taxi, or you run into an old friend and want to grab a coffee – plus accounting for annual expenses such as tax payments.
If this sounds like a lot of work, it is! The good news is that once you've set up your categories and decided how much you can afford to spend in each area, all you have to do is track your actual expenses as you go along.
Take Your Plans Further
Sticking to a budget is where your financial plan is most likely to fall apart. After all, it's tempting to spend just a little bit more here and there or get a great deal on an item you've been wanting to buy. But if you're going to make your resolution a success, you've got to find tools to help you get there and ways to motivate yourself to keep on going.
The key is choosing something that fits your lifestyle. If your phone is permanently attached to your hand, find an app that will help you track your expenses; if you'd rather see things tangibly in front of you, maybe a bullet journal will be just the thing to record what you're spending. You'll also have to decide how frequently you're going to look at your finances – just don't leave them too long! Remember that you can't develop a new habit without making some changes, so set aside a reasonable amount of time for money matters.
If you're finding it hard to stay motivated in tracking your expenses, come up with a reward system for every milestone you reach. This could be something like an extra appetizer or dessert with your next meal out at the end of the month, or a spa day for a successful quarter of being financially responsible. Make sure to account for your reward, too, and make it scale with your goals; if you spend $100 when you've saved $50, it defeats all the work you've done.
Much like the foundation of a house, a budget provides a solid base to build the rest of your finances. We believe that a mortgage is just one part of your overall financial structure. Our mortgage specialist team takes a holistic approach to your finances and makes sure the solutions we present fit with your lifestyle and your financial plan.
If buying a new home, refinancing your existing home, or renewing your mortgage is in your 2020 budget, give us a call at 250-590-6520 to see how the Auxilium Team can work with you this year. Walk-ins are welcome at our 307 Goldstream Avenue location during regular business hours, and we can arrange appointments evenings and weekends to assist you.
Auxilium Mortgage Corporation is based in Victoria, BC and works with clients locally and across Canada. The Auxilium team has over 100 years of combined financial experience and access to dozens of lenders to help you meet your goals.
