by Lisa Web

Created on: January 19, 2009   Last Updated: July 30, 2009

End of year household budgeting tips.

The end of the year is a great time to sit and look at where you are, where you want to be, and make a plan, or budget, on how to get there.

Sit down with a list of all expenses, all bills, and any outstanding debt. Note on this list what you paid in the past year. For example, rent or house payments for 2008 were $12,000.00. If you are staying in the same house or apartment, and have a fixed loan, you already know that this will be your budget number for 2009. Fill in all fixed expenses for the new year, such as housing, car, utilities, and anything else that has a steady monthly payment.

Now, the harder part. Take a look at your last year budget, and what you actually spent. Let's use groceries for an example. If you had budgeted $1200.00 for the entire year, but only spent $950.00, you know that you can move your budget down for the upcoming year, and allocate the saved money to savings, or other expenses. If you were over in an area, such as gas/car care, you would want to ensure that you up your budget for the new year, to reflect the rising prices in these areas.

Looking at what you spent in the past year will give you a good idea of where you will spend your money in the new year. This is also a good time to make choices to cut costs. If you were over budget on cable, what can you do this year to lower the cost. Maybe now is the time to remove the pay movie channels, or stop renting pay per view. This will lower your bill this year. If you were over on groceries or personal care items, maybe now is the time to start clipping and using coupons, or shopping in stores that offer a generic or store brand.

As you are scanning your budget, see if you missed any categories in the past, that you would like to add. Maybe you got a new pet, and should budget for that in the new year. Be sure to be as specific in your budget as possible, to ensure that you have goals for all spending.

Lastly, don't forget the "me" part of your budget. Make sure that you have a few categories for you, for "wants" rather than just "needs" if your budget will allow. This may be only $10.00 per month, set aside so that you can get yourself a nice weekend away for your birthday, or if you have your eyes set on a new outfit. You have to pay yourself a little, reward yourself for staying on budget. Also remember savings, for you, for emergencies, for schooling for your children, or an upcoming trip or wedding. Now is the time to set those amounts, and make adjustments in other areas as needed.

Now that you have your new budget and some ideas of where to cut costs, make a list of what you need to do. Make changes in monthly services, change your direct deposit to put some of your pay directly into a savings, and start clipping coupons. Keeping a list with your budget will be a reminder. Maybe you will stop your gym membership, however will take up walking either outside or in the mall for exercise. Maybe this money that is saved is going into your vacation fund. Think about that each day, it will make the changes easier on you, when you have a "light at the end of the tunnel".

Make small changes, watch your spending, and record everything. At the end of this year, you will be on budget, and hopefully will have an easy time making the next year's budget out.

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