Rachel Cruze

Rachel Cruze

By Rachel Cruze

The ball drops. The lights flash. The fireworks explode. “Auld Lang Syne” plays. When all those things happen at once, it can only mean one thing: a new year!

We all love a good New Year’s celebration, but with it comes the reminder of goals, responsibilities, and resolutions for the upcoming year. And if you’re like most people, somewhere in the middle of all your resolutions is money — as in, the desire to manage it better.

If any of your resolutions for 2020 involve money, then your success will start with a budget. I know, the dreaded “B” word. Sure, creating a budget doesn’t really sound like much fun. But doesn’t it sound better than feeling stressed because you’re living paycheck to paycheck? How much better would it be to know that all your bills are paid, and you’re working toward becoming debt-free or saving to pay cash for your summer vacation? That’s what you can do when you make a plan for your money!

You’ll give up on your resolution much more quickly without a plan. How do you start? First, figure out how much money you have to work with for the upcoming month — before the beginning of each month. This includes your income, your spouse’s income, and any extra income you may have.

Give every dollar a name. Spend every dollar, on purpose, on paper, before the month begins. This is called a zero-based budget, and it works. Basically, when you’re planning for the month ahead, you should be able to subtract your expenses (outgo) from your income to equal zero. When you’re done writing the budget, you shouldn’t have anything left over. My favorite way to manage my budget is the free app EveryDollar. It helps my husband and me stay on track.

A good plan lives and changes as your life changes. You’ll need to review your budget each month throughout the year to make adjustments. If you find you’ve budgeted too little or too much in an area, then adjust.

If you’ve been living without a budget, it will probably take a few months to get the hang of it, and that’s okay. But soon you should have a budget you can rely on. A budget doesn’t limit your freedom, it gives you freedom to spend. It’s about knowing where your cash is going, instead of wondering where it went. Just imagine how great it would feel to be in charge of your finances in 2020.

Sounds like a happy new year to me!

As a #1 New York Times best-selling author, host of “The Rachel Cruze Show,” and “The Rachel Cruze Show podcast,” Rachel helps people learn the proper ways to handle money and stay out of debt. She’s authored three best-selling books, including "Love Your Life, Not Theirs" and "Smart Money Smart Kids," which she co-wrote with her father, Dave Ramsey. You can follow Cruze on Twitter and Instagram at @RachelCruze and online at rachelcruze.com, youtube.com/rachelcruze or facebook.com/rachelramseycruze.

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