UFCU SPONSORED CONTENT — While any time is a good time to make a budget, December offers a great opportunity to create an annual budget and get ahead of the curve so you’re ready to start the New Year on the right foot. Budgets aren’t just about tracking expenses. They help you realize and achieve your financial goals, improve your spending and saving habits, and prepare for the unexpected. Follow these four easy steps to create your New Year budget and be your best financial self.

Step 1: Make a List of Your Expenses — You can either do this with a pen and paper, make notes on your phone, or use a spreadsheet. Start first by listing out categories of your regular expenses, like rent/mortgage, cell phone, utilities, food, internet, subscriptions, credit card or loan payments, and entertainment costs. People often forget all their recurring expenses and their subscription services. It’s helpful to look at your most recent account activity statement to capture monthly expenses fully.

Don’t forget to include irregular expenses, like car registration and home repairs, and quarterly or annual expenses, such as birthday and holiday gifts, insurance premiums, and property taxes.

Step 2: Include Savings and Emergencies — Make sure you include savings for your short- and long-term goals and emergencies in the budget. You want to think of your savings as a monthly expense that can’t be skipped, just like your rent or mortgage.

Step 3: Add Them All Up — Some costs, like your rent or mortgage, stay the same each month. But for others, you may need to look back at your statements. Things like food and entertainment tend to fluctuate each month, and it’s a good idea to look back over two to three months to see what your ranges are. Add everything up and compare the total to your take-home pay (i.e., what’s left after taxes and deductions).

Step 4: Review and Refine — If your monthly pay does not cover all your expenses, look at your list and decide what areas you can cut back from, like entertainment, dining out, and subscriptions. Try not to eliminate your savings category – you may need to adjust the amount, and that’s OK. You can always add to your savings and increase that line item if your situation changes. Or, if you find that you have more money left over, increase your savings amount or pay off debt faster.

Find the program or method for tracking your budget that works best for you. It may take a little time to find your groove, but if you stick with it, you’ll be on your way to better financial health. And that’s something to celebrate.

If you’re looking for more helpful financial tips and tools to better plan, spend, save, and borrow, check out PlanU by UFCU. You’ll find options from talking with a financial health expert to creating a personalized resource center to meet your needs.