Getting Ready to Create Your 2010 Budget
By Yolander Prinzel
If you are like me then you have thought long and hard about your 2010 budget … but you haven’t actually committed it to paper yet. Maybe you are one of the lucky few whose financial situation is left unchanged by 2009 and you can continue using your 2009 budget into 2010. But chances are, in the financially volatile year that was 2009, you did not entirely stick to your budget and even if you did, rising prices and credit card interest rates kept your money from packing the punch you wanted it to. If this describes your situation, then now is the time to start seriously reviewing your financial progress in 2009 and determining how to make it better in 2010.
Collect 2009 Bank Statements
Take a look at your bank statements and see if you had any spending changes during 2009. Did you spend more on vet bills than you budgeted? Maybe you need to beef up that portion of your budget. Did you spend less on entertainment? Then you know it’s possible and might want to make that a permanent change.
Check Your Savings Goals
Do your emergency savings, long-term savings, college savings and retirement savings look the way you anticipated they would at the end of 2009? If not, it may be because the value of your assets in the accounts took a dive or because you weren’t saving enough. Either way, you need to decide if additional savings in 2010 will help keep you on track to your long-term goals.
Make up for Lost Benefits
With the economy in shambles, businesses have cut benefits in many places. Some people lost their employer’s 401k match, others lost bonuses, and some found they had to spend more on health insurance premiums as costs rose and their employers scaled back on contributions. If this is the case for you, then you need to adjust your budget to make up for those losses. Don’t expect the economy to recover and your employer to reinstate the benefits—that may be a long time coming.
Account for New Expenses
Did you pick up any new expenses in 2009 that will carry over into 2010? If so, then you need to bring your budget up to speed and add those expenses in. Ignoring them won’t make them go away, and they can completely change the function of your budget.
Add Any Increased Cost of Goods
This year, we watched as grocery prices, gas prices and other prices started to go up. You may have seen a 10% or more hike in your grocery bill, gas bill—even your utility bills may have gone up. Take a look at your average expenses in these areas and adjust your budget accordingly. A two or three dollar change here and there can really add up.
Check Your Progress on Paying off Credit Card Debt
Are your credit card balances as low as you thought they would be by now? As credit card interest rates rose in 2009, you may find that the dollars you paid in were slightly less effective than you had planned them to be. 2010 may be the year that you get more aggressive about paying this debt off.
Photo credit: Carina Ice
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