Budgeting in the New Year

Look at monthly recurring bills and reevaluate.

• Ask yourself, "Do I need this service?" If no, then cancel it and save the difference.
• "Can I get a better deal?" Research and if so, then make the switch. It may even be with the same company - It never hurts to ask!
• Pay yourself first! Get direct deposit. Have your savings taken out before it even hits your account.

Evaluate health insurance deductibles.

• At the beginning of the calendar year, your out-of-pocket limits and deductibles reset.
• If your plan qualifies for a Health Savings Account (HSA) because of a high-deductibles, set aside money every month to save. This pre-tax saving account let’s you apply those funds to any out-of-pocket health-care costs.

Utilize your FSA - (Flexible Spending Account)

• Spending pre-tax dollars on your healthcare saves you money.
• It also spreads out big expenses over the course of the year. FSA let's you pay that big dental bill at time of service, but only deducts the planned amount per month.
• To get started, you need to make a list and sum your healthcare costs for the year such as co-pays for an estimated number of office visits, deductibles, eye glasses, prescription medication.
• Tip: Try not to overestimate because you will lose the money you do not spend.

Schedule maintenance checks.

• Take care to maintain your assets. (i.e. car, house and appliances). You aren't saving yourself money if you are foregoing necessary maintenance. It will lead to large unexpected bills which is basically the opposite of budgeting.

Lower your grocery bill.

• Always shop with a list!
• Meal Planning is essential. Plan out your meals for the week and let that inform your grocery list.
• Make one trip to the grocery per week to avoid too many impulse buys.
• Don't shop when you are hungry.

Be mindful of your day-to-day spending.

• After you have gone through the big budget items, what is left is personal. Our day-to-day spending can creep up on us. It is the reason we look at the bank balance and ask, "Where did it all go?"
• You need to access your behavior. Spend a month documenting what you are buying. When you look, you may be surprised at what you purchased.
• What can be shaved off? What can you live without? Set parameters and make a plan. This is where you can decide, "I'd rather go on vacation this year with the money I am saving when I stop buying drinks at the coffee shop."
• You might be surprised at my method but I do not spend a lot of time hunting for deals. Actually, I try to minimize shopping. I found that the less time I spend thinking about what I need to buy, the less I actually buy! Remember, just because there is a sale doesn't mean you have to buy something.

I think this list is a great start. I know because I was able to raise 3 kids on one income for many years. Living below your means is the way to wealth. Being frugal is a lifestyle, but budgeting can be for everyone. Don't think of it as a punishment, but as a path to your goals. Be mindful of what you want out of life and get your money working for you!

Liz Rotatori, CPA

Office Manager

Clarity Clinic