Here’s why your finances for the last quarter should be different, and how you can make meaningful tweaks to your budget to stay out of debt.
Factor in holiday expenses
While holiday expenses come at no surprise, life indeed happens, and you might need more than you currently have socked away for holiday-related travel, social gatherings, and gifts. Set up a savings Goal now and ramp up your savings to make sure you don’t get blindsided by those extra expenses.
To figure out how much extra you’ll need, look at your holiday-related spending from last year. You can check credit card bills, bank statements, or, if you have an account with us, your Reports. Reports will help you figure out how much you spent, in which categories, and where your purchases were made. You’ll also want to factor in any new costs for this year. Have there been any new additions to your family, or will you be traveling to a more distant—and expensive—locale to celebrate the holidays?
Account for sick time
Besides holiday-related expenses, the fall and winter months are peak flu season. If you work for yourself or have used up all your paid sick time, you’ll have to factor in money you aren’t earning while you’re in bed battling the flu bug. If you have aging parents or children, you might also need to take time off of work to care for them. You can create a savings Goal that could serve as a mini winter e-fund to account for any unexpected unpaid time off you’ll need to take.
Create an “indoor fund”
Depending on where you live, you’ll most likely be spending more time indoors. In turn, you’ll see a spike in your heating and electricity bills due to the colder climes. Give your budget some breathing room by adding a bit of a buffer. It doesn’t have to be too much; just enough so you won’t find yourself short at the end of the month.
If you don’t currently have a gym membership, you might also have to spend a little more on fitness passes or invest in some indoor exercise equipment. Of course, there are low-cost ways to get creative with burning calories at home.
Save for the end-of-year lull
Depending on your line of work, the end of the year is usually slower workwise, and if you’re your own boss, you may be raking in less dough. Or you might decide to take unpaid time off to spend more quality time with your loved ones. To make sure you stay on top of things moneywise, cut back on your expenses. While you may be spending more on travel, buying gifts, and socializing, see how much you can cut back in categories you have more control over, such as personal items or purchases that can wait. Conversely, if time permits, you can also take on extra side hustles to earn some cash.
Try a new budgeting approach
Because of these special end-of-year costs, you might want to create a special budget to account for these discretionary expenses. For instance, if you’ve made a fair share of tweaks to your budget, you might’ve discovered that the zero-based budget is a good fit for your needs. Or maybe you’re on the other end of the spectrum, and fare better without a traditional budget.
Use your end-of-year expenses as an opportunity to try a new budget on for size. Maybe you can experiment with the bucket approach, where you divide up different categories of spending into separate buckets, or gauge how much more you’ll need to save for these expenses, and see how close you are to the mark.
If you have an account with us, look at your Reports to see where you’ve experienced some spending snafus. Have you made little progress with your online shopping addiction, or are prone to calling a rideshare when you also tap out your public transit pass every month? There’s no need to beat yourself up over it. Instead, think about how you’ll make improvements for the year ahead.
Are you expecting the arrival of a baby next year? Or moving to a new city next year to pursue great opportunities? Making changes now will set you up for success in the upcoming year.
By factoring in these end-of-the-year expenses, you’ll be well prepared to take on additional expenses during the last quarter.
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