Changes To The Budget For 2012

Well everyone a new year is now upon us and I must say that I am looking forward to 2012. I am not sure what this year holds for me just yet but I have a positive outlook with regards to everything, especially my finances.

I am always working on my budget and I give it a tweak or two every couple of months because I believe that a budget needs to change as your financial situation changes. This year I am using a combination of the rollover budget and the zero based budget to track my income and expenses over the whole year.

I will still use a monthly zero based budget where I have a certain amount set for each category and where total income will equal the total expenses for that month. I am also using a rollover budget, where any unused funds will roll over to the next month to form a base for the next month’s spending.

How to Create a Financial Plan for the New Year

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In my case I am using a hybrid of the two because my zero based budget will be tracked via spreadsheet (and a bit through Mint) but I will also allow any unused funds in each spending category to roll over to the next month. Everything will continue rolling over until the end of 2012 so that I can have a total figure for the year, as well as an average for each month.

I am mainly doing this because I want to have an idea of how much I really spend and bring in during one full year. I have been allowing Mint to reset my spending to zero every month but this did not give me a clear picture of what I really spent on gas, for example. There were some months the bill was below $50 and other months where it was above $50 but since I never kept a running total I am not sure what my average really was.

This rolling budget for one year should give me a better idea of what I actually spend and that should help when it comes time to tweak the budget for 2013!!!!

I know that many people will say you cannot combine the two types of budgets because you should have a zero at the end of the month for the zero based budget and a rollover budget implies that you did not reach zero. In my case I will be doing the zero based budget in my spreadsheet where I track all my receipts and will be applying the rollover to Mint.

Author: Lulu

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8 Comments

  1. I also use Mint.com to budget. Previously I only used a handful of categories and put everything else in the “everything else” bucket. I didn’t want to be too rigid for fear that it would make it too difficult to stick with. I found a lot of money disappearing in this mysterious bucket and I was missing savings opportunities. It might take a little extra time but I think it will help save money!

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  2. Interesting to read about your budgeting plans for 2012. Looking forward to seeing how it shapes out. I have also always maintained a rollover budget, which really helped me last year during the holidays.

    -Jean

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  3. I am planning some changes to the way I budget as well, the biggest being how I handle budgeting for recurring expenses such as utilities, insurance and the like. Right now I keep a substantial cash reserve that I think has actually gotten a little too big. We’ll see how things go. I look forward to reading your updates!

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  4. I’m really bad with finances and budgeting, so I decided to start using Mint.com a few months ago. It takes a bit of time to get used to the process and it’s not really an exciting and interesting, but it definitely helps to save money.

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  5. Mint.com is by far one of the flashiest, sleekest, most-web-2.0-ish personal finance applications to hit the market in quite some time. Mint.com is free. But this time I won’t say you get what you pay for, because you actually get some very nice functionality.

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  6. Interesting to learn about your rollover budget for 2012. I am very poor in all these, so I guess I will have a lot to learn from you.

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  7. It has been nice and interesting to follow your budget under 2011 and I wish you all the best for your budget work for 2012.

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