How to create a smarter budget for 2024
A new year is coming, and many people plan to start 2024 by focusing on their New Year's resolutions. And, one common goal when starting a new year is to be smarter with money. That's a worthwhile endeavor — and one that is achievable if you put in the time and effort.
Creating a budget is key to making better money decisions throughout the year. It's also important to budget in the right way, which involves setting achievable goals to put you in a better position for the future.
Here are a few things you can do to create a smarter budget for 2024 and set yourself up for financial success in the long run.
Saving is a key part of a smart budget. Open a high-yield savings account to start saving now.
How to create a smarter budget for 2024
There are several steps you can take to create a smarter budget for the new year. Remember, though, that you don't have to follow each of these suggestions. The right budget plan for you will depend on factors like your income, debt and financial goals.
Set aside money for savings each month
One key to creating a successful budget is thinking both short- and long-term. When considering long-term goals — buying a house, sending your kids to college or planning for retirement, for example — one of the biggest steps you can take is setting a realistic amount of money aside for savings each month. It doesn't have to be a lot. Setting aside even $50 per month for your savings can make a big difference in the long run.
Just as important as the amount of money you set aside for savings is what you do with it. If you keep your savings in your checking account, it will sit stagnant. It could make more sense to open a high-yield savings account and put your monthly savings into it instead.
High-yield savings accounts offer higher rates than traditional savings accounts. And, over time, the money you put into your savings account will create a good bit of extra cash for you through the power of compounding interest.
Find the right high-yield savings account for you online now.
Autopay your credit cards
Using credit cards can be a good idea in certain cases. Doing so allows you to build credit, which could help down the line when you need to borrow money for a home or another purchase. Letting your credit card charges linger, though, can lead to debt that's hard to pay off.
So, if you're going to use credit cards, try to set up auto payments to pay off your credit card in full each month. If you only spend what you can afford to pay off each month in full, you'll get the benefits of using a credit card, like earning points and building your credit history, without racking up excess interest.
Cut subscriptions
There is a good chance that you currently have a monthly subscription that you don't use, whether it's a newspaper, magazine or streaming service that is sitting unused and costing money each month. If you cut just one or two subscriptions, it could make a big difference in your budget each month – and allow you to put more money in a high-yield savings account.
Track your spending
Before you can refine your budget, you need to know exactly how much you are spending. Whether you use an app on your phone or a paper and pen, take the time at the start of the year to track your spending and learn how much money is going into different categories.
Once you've tracked how much you are spending, find ways to make smart cuts. If you find you are spending a lot on frequent coffee runs, consider making coffee at home instead. Or, if you're ordering a lot of takeout, find ways to cook more.
The bottom line
A smart budget takes into account both your long- and short-term goals. And, one of the most important parts of creating a budget is setting aside money for savings each month. It doesn't have to be much, and if you put it into a high-yield savings account, the compounding interest will make it worth more in the long run.
