How To Prepare For Your 2024 Budget (Free Worksheet Included!)
It’s that time of year again, where hidden behind every pumpkin spice latte, leftover turkey sandwich, and regifted Christmas present lies the nagging call of the New Year’s resolution. If you found yourself here on this blog, I'm guessing that getting your finances in order is top of mind. .
The good news is, jumping into your new 2024 budget after weeks of Christmas spending that you told yourself “doesn’t count” won’t be such a jarring transition this year, because I am here to help!
In this blog and its accompanying worksheet, you will familiarize yourself with tasks you should complete and ideas you should contemplate to set you up for a year of successful budgeting!
TO DOWNLOAD YOUR FREE WORKSHEET, CLICK HERE!
Part I : To Complete
Complete A Two Month Self-Audit
Pick any two months from 2023 that best reflect an average spending month in your life, and complete a thorough self-audit. A self-audit is when you write down every bill, expense, and purchase made across all of your debit and credit cards, as well as any outstanding debt payments.
Organize these purchases into categories, for example: How much did you spend on DoorDash? What was the highest amount transferred into, then back out of your savings account? What surprised you the most about your spending?
Open High-Yield Savings Account
In order to get you prepared for that first paycheck of 2024, I recommend opening a high-yield savings account if you don’t already have one. This account will be the new home for your emergency fund.
This is a savings account that could earn you up to 5% interest, meaning eventually, your money will be earning you hundreds of dollars as it sits there. Two I recommend are SoFi (4.60% APY as of writing this) or Ally (4.25% APY). Both allow you to create really helpful savings categories!
Subscription / Fee Cleanse
While completing that two month audit, you likely came across a few subscriptions and fees that you completely forgot about. Now is the time to GET RID OF THEM! Cancel any subscriptions you are no longer using, and for the ones you simply can’t part with, see if you can join a friend or family member’s account. (RIP Netflix password sharing.)
During that audit, did you see any unexpected fees? Now is the time to dispute them. From overdraft to low balance fees, you will be surprised how willing banks are to refund some of these fees.Bill Negotiation
This one may seem a bit intimidating, but remember, you quite literally have nothing to lose in this negotiation. What bills can you lower before the new year? Still paying for a traditional phone plan? Switch to Mint Mobile. When was the last time you shopped around for cheaper car insurance? You can even negotiate your wifi and cable bills! Here is a quick how-to.Organize Debts
Before you can plan the fun parts of your budget (i.e. savings!!) you must first have a detailed understanding of what debts you need to pay off first. Organize your debts into two lists, the first from largest to smallest amount, and the second in order of highest to lowest interest rate.
Depending on your situation, it might make sense to use the snowball method, where you pay off the smallest $ amount of debt and work up to the largest. For some, it may make more sense for you to tackle the debt by the highest interest rate first working your way down to the smallest. Here are a few of the debts to consider:Student Loans
Consumer Debt (credit cards)
Medical Debt
Car Debt
Mortgage
Personal Debt (owed to family or friends)
Collections
Decide on Budget Template & Format
One way to stay motivated and on top of your spending is to use a budgeting method you are excited about! This could be an online budgeting template you found on etsy that matches your personal aesthetic, or it could be a physical notebook if you find that writing out your numbers on paper helps you plan better.
Disclaimer: You do not need to spend money on this step if you don’t want to. I started my budgeting journey for free on a google doc that I still use to this day!
Follow Content Creators For Motivation
A quick mental hack to getting out of a budgeting slump is to follow personal finance content creators. As always, I give another disclaimer here - only consume finance content if you trust yourself to be a critical thinker, and find that this content helps (not hurts) your progress. ere are a few of my favorites:Caleb Hammer - Motivating viewers through showing in depth financial audits, occasional passionate-yelling.
The Money Guys - Taking technical concepts and easily explaining them to a wider audience.
Zoe Prichard - Proving comfort and encouragement along her own financial journey (great for freelancers and creatives).
Part II : To Contemplate
2024 Savings Goals
Organize your savings goals for 2024. You should aim for realistic and achievable goals, but don’t leave room to slack off. Here are some ideas of savings goals to consider:Emergency Savings (3-6 months of expenses)
Sinking Funds (travel, medical, pets, gifts, etc.)
Big purchases (new car, upcoming move, etc.)
Retirement (401K, Roth IRA)
Investing (through platforms like Robinhood or Fidelity)
Complete a Debt Self-Assessment
Now that you have completed Part I and are aware of all your debts, it’s time to have an honest conversation with yourself about how you perceive and manage your debt.
Once you pay off your credit cards should you cut them up, or can you reverse your bad habits?
Do you pay your bills on time, or do you need to put systems in place to make sure you aren’t missing payments?
What actions need to be taken to restructure your old habits about keeping and growing debt?
Remember, the goal is to pay off your debts and never accrue debt again, so how can you make this happen?
Address Your Mental Health
In my opinion, this is the most important step for lasting success in managing your money. If you are currently in therapy, now is the time to bring up your budgeting goals in your sessions. If you aren’t in therapy, I highly encourage you to begin before the new year starts. By addressing your habits, relationship, and mindset regarding money at their core, you can create a lasting transformation for your entire future, and avoid temporary changes.Shift Your Money Mindset
I hope, that after finishing Part 1, something *clicked* in your mind as you confront your past spending habits and the reality of your financial situation. This list is not meant to make you feel ashamed of your habits, but to show you that the financial future you dream of is possible!
Here are a few phrases to help you stay in this mindset :Focus on abundance, not scarcity
Believe that everything will work out in your favor
You are in control of your money
Every dollar you own is valuable
Build Your Dream Budget
You have finally arrived at the fun portion of this exercise! Here, I want to take the budgeting template you chose and create a “dream budget” for 2024. What does a dream month look like when you are debt free, with money in a savings account, and enjoying your life free of financial guilt? Write it out!
Make three separate budgets: A realistic, an aspirational, and a true fantasy budget! How much would you spend eating out with this dream salary? Would you buy designer? How much would you be investing? What would your savings account look like? The sky's the limit! (Unless you dream of owning a private jet, then the sky is included too.)Build Your Support System
The final, and most foundational step, is building a support system of people you trust. This may be one person. It could be a partner, a friend, your therapist, a financial coach, or a sibling. Whoever it is, make sure it's someone you trust to support you on a journey to financial freedom.
That means they won’t encourage you to spend, they won't shame you for a bad month, and they won't try to take advantage of your newfound wealth. Think carefully, and intentionally, before asking this person to step into this role.
That’s a wrap! Print out the attached worksheet to keep this by your workspace where you plan to budget, or fill it out digitally for you online budgeters!
Happy Budgeting!
TO DOWNLOAD YOUR FREE WORKSHEET, CLICK HERE!
Here are a few blogs I have written that might help you along the way :
