Just like how your needs and preferences change, so do your Spending and saving patterns. In turn, budgets are living, breathing things. With that in mind, the end of year is the perfect time to take a deeper look at your money situation and make changes to your spending plan. After all, how can you get to your destination without an up-to-date roadmap?

Here are steps to take to review your spending plan, and make tweaks accordingly:

1. Account for Changes in Living Expenses

If you’re feeling a bit of a squeeze with your budget, there are greater forces at large. It turns out the cost of living is increasing at the fastest rate in a decade.

It’s easy to turn a blind eye and take a “blame the man” stance about your money situation. But it’s super important to take a look at what’s shifted with your personal Expenses and make changes within your sphere of control.

For me personally, this has been what I’ve called my year of forced upgrades. I had to buy a new cell phone and eventually switch carriers, was forced to relocate out of my apartment, and bought a new car to retire my 15-year clunker. As you might imagine, this resulted in increased expenses. This affected my renters and auto insurance policies, not to mention tacked on one-time a bunch of one-off expenses.

Check and see what expenses have changed in the past year, and account for anticipated changes in the upcoming year. For instance, maybe you are planning to move cities, have a baby, or travel more.

2. Look for Spending Patterns

While changes in your bills is one thing, looking for trends in your everyday spending can be a more challenging task. Review your transactions in the past year using a money management app or by scouring debit or credit card statements. Break it down by category, or by retailer. I recently checked and found that I my bougie side has emerged this year, and I’ve been spending more on higher-quality, pricier foods. On the flip side, I haven’t been eating out as much.

Looking at your spending patterns will help you gauge how much you should set aside for discretionary (aka variable, or non-bills) spending. Check to see how much you spend on groceries, shopping, entertainment, eating out in a given week or month, then allocate accordingly.

3. Plan the Months Ahead

Ideally, you should have a spending plan in place for the next six to 12 months. That way you can set up goals for big-ticket items such as to create saving goals for major expenses, such as trips, birthday parties, and equipment for my hobbies and projects.

“Keeping an up-to-date spending plan is useful and beneficial because it allows you to plan how you want to use your money, instead of looking back and wishing you had done something differently,” says Kayse Kress, a CFP® and fee-only financial planner for physicians. “It’s important to prioritize your goals in case you can’t accomplish everything right away. Don’t feel discouraged and think of it as something you can work towards down the road.”

4. Cut Back By Using the “Cost-Neutral” Approach

One way you can approach slashing expenses so to go for the “cost neutral” approach. What this essentially means is that try to cut back in some areas, and put the money saved into other expenses. Doing so will “null” another expense.

When I switched cell phone carriers, I expected to pay more. But I ended up saving $50 a month on my cell phone bill by switching from a personal account to a small business one (self-employment perks). That $50 is going toward a recurring expense for my freelancing business.

My good friend Greg is a master at referral codes. He’s probably doled out enough referral codes for ride-sharing apps and food delivery services to save him $1,000 in eating out and transportation (no joke).

5. Save by Going for the Easy Wins

To give yourself a motivational boost—or if you don’t have a ton of time—go for the “easy wins” first. This means seeing if you can lower or nix any of your recurring expenses, such as your cable bill, insurance policies or subscriptions.

All it takes is a call to the company to see what discounts or promos are available. For instance, many insurance policies offer a discount rate if you opt for a bundle, sign up for autopay, or with group discounts. For instance, I scoured my internet bill to discover there was a $10 monthly charge to use the service provider’s router. Most of the time you can return their router and use your own.

If you’re nervous about putting on your negotiator hat, ask a trusted friend or family member to haggle on your behalf. (Yes, I’m usually that friend who loves to ask for a better deal.) Or use a service such as Trim or Truebill.

6. Pay Yourself First

While this may not always be realistic, aim to save for your saving goals, then live off the rest. You’ll need to figure out how much you need for living expenses, and lower expenses as necessary. But it feels great to be able to pay steady progress on the things you care about the most, and not have all your money be spent nilly-willy, only to feel frustrated that you haven’t made a dent on your goals.

7. Set Up Money Dates With Yourself

Checking in once a year is great, but ideally try to check in monthly to account for any changes. If you’re partnered and share expenses, make a point to touch base and chat openly about money on the regular. I love my money dates, and do it once a week to categorize expenses, come up with money flows, and look for areas I can cut back.

It’s all about having a plan, so you can feel more in control of what you do with your money, explore different options, and create your own approach and style to how you manage your funds. Not only will it prevent you from experiencing financial stress, but you can better align your spending with your values and your goals. And that’s what a spending plan is all about.

The post How to Reassess Your Spending Plan in 7 Steps appeared first on MintLife Blog.