My 2018 Budget

Tis the season to be jolly. Fa-la-la-la-la, la-la-la-la. Strike the harp and create your budget. Fa-la-la-la-la, la-la-la-la.

I love this time of year because my home is full of Christmas tree and sugar cookie scents and it creates the best environment for me to analyze my finances. You might think I’m nuts, but there’s no better time to create your budget and to prepare for the new year!

Here is what I do to prepare for the next year:


To me, this is the most important part of creating a fresh new budget for the new year. When my wife and I reflect about our income, expenses and overall financial position, we are very honest with ourselves. We both take a moment to share how we feel about our cash management throughout the year, what went wrong and right, and this gives us both the opportunity to contribute to our budget and strategy.

Also, we review the goals we set the previous year and we ask ourselves, did we accomplished the goals? If not, why didn’t we? If so, what can we do next year to build on our momentum? This transitions perfectly to creating new goals…

Set goals

Personally, our goals are to max our contributions into my pre-tax retirement contributions, post-tax IRA contributions and to her pension plan (pensions still exist!!!), make more aggressive payments to our student loans and to our mortgage. For our student loans, our goal is to pay it off in less than 10 years (minimum payments would be 25 years) and to cut our 30 year mortgage in half — the good thing is we are on pace! Also, we want to have 2 vacations a year and we created a budget line item for gym memberships 🙂

So, what are your goals? Are they realistic and achievable? What will it take for you to achieve them? How will you hold yourselves accountable?

These are some tips and strategies I use to be financially accountable: How to stay accountable to your financial goals

Here is my FREE budget spreadsheet: Budget Template

Now, it comes down to actually creating THE budget! Feel free to download my budget spreadsheet to help you create your own budget. If your good with excel, customize it and make it your own.

But what’s important is that you have a written game plan. I view my budget as my strategy, not a method to restrict my life and spending.

My spreadsheet has a second tab for my net worth analysis. It’s a very simple format and this helps give you a snapshot of your financial position. By analyzing your assets and liabilities, this gives you an opportunity to reflect on your financial weaknesses and strengths and how you can improve them.

Now that I think about it, when my wife and I created our goals for the new year we also reviewed our net worth statement and pin pointed which liabilities we wanted to focus on AND how we can increase our assets, specifically related to our investments and retirement accounts.

If you look over your assets and you don’t have an emergency fund, seriously make this your priority. I’ve written a bunch about emergency funds. Check them out: 7 steps to build your emergency fund and savings tips in general.

As you create your budget, here are other tips:

  • your cash flow should NOT be in a deficit
  • live below your means
  • my personal rule of thumb is to save at MINIMUM 10% of your net income
  • if you have debt, prioritize those payments as fixed expenses and create a reasonable strategy to pay it down faster
  • here are some debt management strategies: unsecured versus secured ; snowball versus high rate methods

The bottom line is to create your game plan and don’t wait for the last minute. The 30 minutes or hour you spend working on this will seriously pay dividends for yourself, especially if you haven’t lived with a budget in 2017. If you haven’t had a budget, maybe this should be one of your new years resolutions!



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