Expert Tips to Become Financially Smarter in the New Year

Budget Reset

Rachel Cruze emphasizes the importance of a budget reset to start the new year on a strong financial footing. She suggests eliminating unnecessary budget categories and planning for larger expenses through sinking funds. "Sinking funds are like magic because you slowly, slowly put money in each paycheck at a time," she explains, highlighting their effectiveness in managing future expenses 1. Additionally, Rachel advises using budgeting tools like EveryDollar to track transactions and maintain control over finances 2.

   

Sinking Funds

Planning for future expenses with sinking funds is a key strategy Rachel Cruze advocates for effective budgeting. She recommends identifying upcoming large expenses, such as car purchases or home repairs, and gradually saving for them. "When you get to the time that you're looking to use the funds, it's all there to pull from, which is just absolutely wonderful," Rachel notes, underscoring the peace of mind this approach provides 1. This method allows for financial preparedness without disrupting monthly budgets.

   

Subscription Review

Rachel Cruze highlights the importance of evaluating subscription spending as part of a budget reset. She advises reviewing all subscriptions, such as streaming services and gym memberships, to identify those that are no longer needed. "Twelve months is a long time to be spending money on subscriptions," Rachel points out, encouraging listeners to cut unnecessary expenses and save money 1. This practice can lead to immediate financial improvements and more efficient budgeting.