A Step-by-Step Guide to Saving, Spending, and Budgeting for Next Year

Creating a financial plan for the upcoming year is one of the best ways to ensure long-term financial stability. Whether you are saving for a big purchase, investing for the future, or trying to reduce debt, mapping out your budget is essential. This guide outlines strategies to help you achieve a balance between saving and spending wisely.

Assess Your Current Financial Situation

Before diving into next year’s budget, start with an honest evaluation of where you stand today. Review your income, recurring expenses, savings, and any debt you may have. This step is critical for identifying areas where you can improve and knowing how much you can realistically allocate toward savings and discretionary spending in the future.

Set Financial Goals

Once you’ve assessed your finances, the next step is to set clear, measurable goals. Think about what you want to achieve within the year, such as:

• Building an emergency fund

• Paying down credit card debt

• Saving for a home or vacation

• Contributing more to your retirement fund

Each goal should have a timeline and target amount, which will make it easier to track progress and stay motivated.

Create a Monthly Budget

Breaking down your yearly budget into manageable monthly chunks makes it easier to follow. Start by listing all your fixed expenses, such as rent, utilities, loan payments, and subscriptions. Then allocate a portion of your income toward your goals, such as savings or debt repayment. Finally, determine how much you can safely spend on discretionary items like dining out, entertainment, and travel.

Using a budgeting tool or app can help simplify this process by tracking your spending and alerting you when you’re nearing your limits.

Build Flexibility into Your Budget

Life can be unpredictable, so it’s crucial to build flexibility into your budget. Set aside a portion of your income for unexpected expenses, such as medical bills or car repairs, to avoid derailing your progress. This buffer, often part of an emergency fund, helps keep your financial goals intact, even when surprises happen.

Monitor and Adjust Throughout the Year

Your financial situation can change over time. Regularly reviewing and adjusting your budget ensures it remains effective and aligned with your goals. Schedule quarterly check-ins to reassess your progress and make any necessary adjustments, such as reallocating funds or cutting back on non-essential expenses.

By staying proactive, you’ll maintain a healthy balance between saving and spending, ensuring your financial security for the future.

IMPORTANT DISCLOSURES

The opinions expressed herein are those of Ballast Advisors, LLC and are subject to change without notice. This material is for informational purposes only and should not be considered investment advice. Ballast Advisors reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs. The information in these materials may change at any time and without notice. Ballast Advisors, LLC is a registered investment advisor under the Investment Advisers Act of 1940, as amended. Registration does not imply a certain level of skill or training. More information about the firm, including its services, strategies, and fees can be found in our ADV Part 2, which is available without charge upon request. BAL-24-75