Adjusting Your Budget for the End of the Year

With back-to-school season fast approaching and winter holidays just a few months away, it’s a perfect time to reevaluate your budget for the end of the year. The last half of the year can be expensive with increased costs for kids, tons of gifts to buy for the holidays and lots of family visits for big meals. All of these things lead to increased monthly expenses that can put you in a bind if you don’t plan ahead.

To get your finances ready for the end of the year, start by looking at what expenses you have coming up specifically. The following list provides some questions you can ask to help get you started:

• What, if any, are your back-to-school expenses?
• Do you have family coming in for Thanksgiving or the winter holidays?
• Do you plan on taking any trips at the end of the year?
• Who are you buying gifts for and what do you want to get each person?
• Will your salary be increased or decreased by seasonal employment cycles?

All of these factors can have a big impact on your budget and your bottom line, so it’s important to plan ahead to make sure you don’t end up struggling to make everything work. It’s important to be a specific as you can in estimating expenses, as well as any salary adjustments you may have in the last half of the year.

Once you know how much available cash flow you will need to cover the any costs, you can start adjusting your budget now to ensure the money will be available when you need it. This will help you avoid buying too much on credit at the end of the year and ending up in a bind when it comes to your finances. To free up additional cash flow, look to cutting or reducing any discretionary expenses from your budget, which are things you spend money on regularly but don’t necessarily need. You can commit to cooking more fresh meals at home or taking your lunch to work to reduce your dining costs, or reducing your entertainment budget.

If you evaluate the upcoming costs and you see there is going to be a problem with your budget at the end of the year, don’t wait for it to become a problem before you find a solution. Many consumers’ budget problems are caused right now by holding too much debt for their budget to handle. Developing a strategy to reduce debt quickly or consolidating debt will reduce your monthly debt payments so you have more cash flow available for the coming months.

Assess your budget to see if you can implement a debt reduction strategy to reduce debt on your own. If you won’t be able to reduce the debt fast enough, contact a nonprofit credit counseling agency to discuss your options for debt consolidation with a certified credit counselor. You may be able to reduce your debt payments by as much as 50 percent.