Fred Harteis News Articles - LIKE MANY NEW YEAR'S resolutions, sticking to a budget is extremely difficult. In fact, even just a few weeks into the new year, you can easily find yourself going off-course. That's why it's important to be realistic about the expenses you expect to incur.
Ideally, you should begin the year with an annual budget -- consider this the master plan -- and then, as the year progresses, draw up a budget for each month before the previous one ends, says Judy Lawrence, author of "The Budget Kit." That way, you can revisit certain expenses and revise accordingly. To help you put together your budget for 2008, here are some things that you should definitely consider:
1. Keep Track of Your Regular Expenses
If you're the one paying the bills each month, this is probably the easiest part of your budget to put together. Take note of all your regular monthly expenses, including fixed payments for, say, your car and mortgage (or rent), and your fixed (but sometimes variable) costs, such as gas, cable and phone bills. Then jot down your seasonal, biannual and annual expenses. For example, if your car needs a tune-up at least once a year, factor that cost into your annual budget.
2. Prepare for Rising Energy Prices
For the 2007-2008 winter season, the average household is projected to spend $1,955 on heating oil, a 33% increase from the previous winter, according to the Department of Energy (DOE). Homes with natural gas are expected to pay $865, a 6% increase. Rather than getting hit by a monstrous bill, re-adjust your budget with a few simple steps. If you live in a state with cold winters, ask your oil or gas suppliers if you can sign up for a set pay rate for the entire year. That way, rather than receiving exorbitant bills in the wintertime, you'll pay a set amount each month, says Antoine Smith, information specialist at the DOE. Keep in mind that once you sign up, the rate won't change even if there's a mild winter.
3. Eliminate Credit-Card Debt
The average household with at least one credit card carries $9,616 in credit-card debt, according to Cardweb.com. If you have credit-card debt, it's time to start paring down the lifestyle and focusing on paying it off. First, remove as many entertainment and other unnecessary expenses from your budget as you can, and then put all of that money toward paying off your debt. Otherwise, no matter how well you plan your budget, you'll always end up overspending on the high interest rates and fees that accompany your credit cards, says Rich.
4. Build an Emergency Fund
Unexpected emergencies, like temporary unemployment and medical expenses, can blindside you financially. Rather than depending on an interest-charging credit card or loan to help weather such storms, try to save as much as you can when your finances are stable so that you'll have a cash reserve when you need it.
5. Estimating Your Tax Bill
Before you finalize your budget for the year, schedule an appointment with your accountant to get a rough estimate of your tax bill. Because of last year's volatile markets, you're likely to get hit with capital-gains taxes if your holdings include mutual funds in brokerage accounts that had high returns in 2007, says Theodore Lanzaro, certified public accountant.
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About Fred Harteis: Fred Harteis leads Harteis International. Fred Harteis has a background in agriculture and has created many successful business ventures.