Is your family budget expected to change in 2022? Here’s how to find out

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Promo: If these signs apply to you, it’s time to update your budget.

The start of a new year is a good time to set financial goals and see what it takes to get there. You may, for example, want to top up your emergency fund by saving three months of living expenses in your savings account. Or, you might want to finish saving money to buy a house.

To increase your chances of reaching your financial goals, it will help you stay on budget. And if you already have one in place, you’re off to a good start.

But sometimes changes in your budget may be necessary. Here’s how to know if you should be tweaking yours in the coming year.

Have your expenses changed?

Your cost of living may have increased recently. Many people, for example, are spending more money these days on groceries and gasoline due to inflation. And these are increases your budget should reflect.

On the flip side, you may have cut some of your personal living costs. Maybe you’ve paid off your car, so you no longer have to factor in a monthly payment of $ 300 for your auto loan. Or maybe you’ve decided to downsize your living space, saving $ 200 per month on your rent. These are all changes that need to be factored into your budget, so if they apply to you, your budget needs to be refreshed.

Has your income changed?

Many people will get a raise once 2022 kicks off. And if you don’t get a raise in your main job, maybe you intend to increase your income by getting a side job.

Either way, this extra income should be reflected in your budget so that you can get the most out of it. If your income increases by $ 300, you may want to allocate more money in your budget for your savings, IRA, or an existing loan that you are trying to pay off.

Of course, it could also be that your income will be lower in 2022. If you are planning to move from a full-time job to a part-time job, this is a change you will need to consider. Likewise, if you are exhausted from a full-time job and a side activity, you may decide to give up your second gig for a while and recharge your batteries. But if this is the case then you will have to take into account the resulting drop in income.

Give your budget the attention it needs

Spending some time adjusting your new budget for 2022 could make it easier to follow and more useful. Review your expenses to see which ones change, and factor in any adjustments to your income, for better or for worse.

In fact, not only might it be appropriate to update your budget in early 2022, but you should also plan to revisit it three or four months later to make sure it really works for you. It might not be the most exciting way to spend an evening, but it is a decision that could really benefit your money.


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