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We’ve entered a new year and a new decade. Not surprisingly, this fresh start has probably brought new goals to mind — like money management.
If you're planning to start balancing your income and spending, here are four things to keep in mind before you dive headfirst into budgeting in 2020.
1. Budgets aren’t just a New Year’s resolution
If budgeting is one of your New Year’s resolutions, maybe it's time to think about it differently.
"My personal opinion is forget New Year’s resolutions," says David G. Metzger, certified financial planner and the founder of Onyx Wealth Management in Chicago. "They never work."
Budgeting is more than just a January whim, so don't view it as such. Before you begin, be honest with yourself about if you’re ready to make changes that extend into the foreseeable future.
2. You’ll need a support system
Know that you don’t have to do it alone. Tools like budget apps can help track your spending, while people in your life can hold you accountable along the way.
"An accountability partner or budget buddy can really be helpful when your motivation is waning about the end of February," says Colleen Weber, a CPA and certified financial planner in Chanhassen, Minnesota.
If you’re part of a couple, devote 20 minutes each week to talking about money together, she says. Look back at your recent money decisions, anticipate major expenses coming up and get on the same page about strategies to reduce spending in the week ahead.
Even if you’re not part of a couple, potential encouragement is everywhere.
"If you have a picture of a vacation place that you want to go to, post it on your refrigerator or somewhere where you would see that regularly," Weber says. "You can say, 'This is why I packed my lunch today. I’ll be in the Bahamas this time next year.'"
3. Fun won’t be a distant memory
When you commit to budgeting, you don’t have to kiss movies, concerts, vacations and fancy dinners goodbye. In fact, it’s crucial for you to leave room for discretionary spending.
"A budget where there is no room to have fun — you’re wasting your time," Metzger says. "Nobody wants to live that way. Nobody’s going to live that way."
Ideally, according to the 50/30/20 budget, 50% of your budget should be allocated for needs, 30% for wants and 20% for savings and debt repayment.
When you do have to cut back, it helps to change your thinking. Budgeting doesn’t always have to be confining, especially if you’re accomplishing goals like saving for a house or paying down debt.
"Think of it in terms of a predetermined spending plan and not a budget restriction plan," Weber says.
4. Don’t expect perfection
Remember, you’re not perfect — and your budget doesn’t have to be perfect. Be patient with yourself, especially if you’re taking steps in the right direction.
"Cut yourself some slack," Metzger says.
That being said, check in on your progress regularly to review your spending and ensure you’re following through with the budgeting goals you’ve implemented.
"If you’re making positive changes and you’re making these positive incremental steps, take stock of them," Metzger says.