Even if you’ve been ‘good’ all year, the holiday period is a time when positive habits tend to go out the window. Whether it’s a few too many turkey legs or mugs of eggnog, or so many Apple Pay confirmation ticks that you need to keep your phone permanently on charge, things can get a little out of hand.
But it’s ok. Don’t let that anxiety spiral, because just around the corner is a chance to start afresh 🧘♀️
That’s the promise of a brand new year. You can forget about any mistakes from the past, and focus on making the right decisions going forward. Even so, there’s one key area where people go wrong when it comes to making changes in the new year.
They just go too hard.
Making unrealistic promises to themselves that they’re likely to break before the end of the New Year's Eve party. Because just like anything we do, if you want to stick to a budget and help build better financial habits in the new year, it needs to be ✨realistic✨ Here’s how you do it.
Oh, btw if you’re in goblin mode and would rather Cleo budget for you, she can build a personalized AI budget based on your spending history. Yep, really 👁️👄👁️
Why do you need a budget?
Ok, first things first, why are you doing this? Budgeting isn’t necessarily the most fun thing in the world, so there must be a reason why you’ve decided to get down and do it. Got debts you need to pay off (don’t we all 💀) or want to start saving for a down payment so that 🤞one day🤞 you’ll be free of your landlord?
Or maybe you just want to put aside some cash for a rainy day fund, pay for a sweet vacation or buy a new (used, let’s be real) car.
Whatever that reason is, you must have a clear idea of why you want to budget. It will make the whole process much easier if you’ve got a picture in your mind of where you’re trying to get to.
Once you’ve got those savings goals laid out it can help to create specific savings buckets for them, which btw, you can do right in the Cleo app.
Where you stand
With that out of the way, you need to understand where you are right now. It’s easy to somehow always feel short on cash, while also having no idea where the f*ck all your money goes every month (probs Starbucks 🤡)
So now’s the time to get it all out there. Because that’s the first step in making sure your budget is realistic. The problem with most budgets is that people start with what they think they spend or want to spend.
Oh, sure, you only spend $15 a month on Doordash 🙃
Instead of playing that game, we’re going to start with where your money has really been going over the last three months. Yes, this will be a little weird because of the holidays, but that's good. There are always events or birthdays and random things that cost money, and it’s important to budget for them too if you want it to be realistic.
Get the notes app on your phone or an old-fashioned pen and a piece of paper, and write down all of your income and expenses. It helps to have your online banking app open so that you can scroll down (and down, and down, and down) to see all of your past transactions.
Once you’ve gone through this process, you'll have a number. Either a positive one, meaning that you’ve got a bit of extra cash left over each month, or a negative one, meaning you're short.
Don’t worry, this is just your starting point. The most important thing is to have a long list of everything you ✨actually✨ spend your money on.
In the black? 🙂
If you’re bringing in more money than you’re spending, then you’re good! The important thing now is to stick to it, which is going to mean keeping an eye on your spending each month, and comparing it to your budget.
Using an app like Cleo can be a huge help, allowing you to get personalized financial insights and access a savings feature to build a f*ck it fund for a ‘rainy day’ ☔️ and she can even adjust your budget based on changes in monthly income from things like gig work or overtime 💅
In the red? 🙃
So your number’s negative, meaning you’re spending more than you’re earning. Don’t worry, Cleo’s not going to let capitalism take away all your fun, we’ve just got to get a little ✨mindful✨
You need to cut some expenses or increase your income in order to bridge this gap. So, which is more realistic? You might dream of going viral on TikTok (we believe in you), but it’s not suuuper realistic to have this as your Plan A for fixing your budget.
But a few extra shifts at work each month? Yeah, that’s a plan you can stick to.
On the expenses side, building a realistic budget that you can stick to means leaving in spending on your wants, not just your needs. Look for ways to cut back a bit, without becoming like a young Harry Potter living under the stairs 🪄
Love to eat out? Maybe keep it to once a week rather than twice. Into gaming? Spend some time getting to know retro titles or indie games rather than picking up the big blockbusters at full-price pre-orders.
It’s all about looking for ways to keep doing the things you love, but in a way that’s more wallet-friendly. That’s the only way you’ll stick to a budget in the long run.
Need a little extra help staying on track? Get Cleo and type ‘roast me’ in the chat for some hard truths about your spending habits. If you prefer a softer approach, say ‘hype me’ instead for some positive ✨affirmations ✨