I think it's really important to set financial goals for yourself and family before the year starts. Every dollar counts and there's nothing worse than getting through half the year only to find that you're behind where you wanted to be.
It's important to look at each year month by month so that you can lay out which months might be financially cumbersome compared to others. For example, we know that we'll be taking two trips this year - those months will need more of a financial buffer than the others. Christmas 2011 is also on my mind now that I have a good idea of what things cost this past Christmas.
I did our Christmas budget this morning so that I know how much money is required each month to be put aside. I realized this year that I didn't leave nearly enough money in our initial budget for our parents and extended family. So I had to distribute that properly for the upcoming year. I took the total Christmas budget for next year (which is $1498 - including food, decorations and presents) and divided it by 12 (months in the year). So now I know that $124 needs to be put aside monthly for Christmas. We prefer to just take the money out of budget in one month rather than allocating the money monthly. You must do what's right for you!
With setting up our new budget I have to look at what I can improve on from last year. We now have a home improvement category in our budget which wasn't there before. We have also kept the budget realistic. It's not realistic for us to completely cut our our Starbucks coffee but we can significantly reduce it (twice a month). So our new budget reflects this.
A system we're also contemplating is choosing 6 months throughout the year where we live more frugally and throw more money into our financial goals and 6 months where we live more realistically.
More on Budgets Later! :)
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