It is no secret that almost everyone is working a bit harder to make ends meet these days.
As inflation continues to grow and the job market continues its usual winter slump, those quarters and dimes we so often overlook in our paychecks have become increasingly important to our livelihoods.
With the holidays quickly rolling past and a new year right around the corner, now is the best time to take a look at your financial situation and prepare for the next twelve months. Here are some tips and tricks to help you build and maintain a budget in 2026.
Keeping track
The Federal Trade Commission suggests that Americans start building their budgets by monitoring their expenses for a month — using purchase receipts and bill statements to tally up the total amount spent during the four-week period. This gives a fairly accurate estimate of how much money is being used per month, and when framed against the total pay for the period, how much is being saved versus how much is being spent.
For those who don’t get paid monthly or bi-monthly, the FTC recommends tallying up your total annual income and dividing it by 12 to find approximate monthly earnings.
Budgeting strategies
Now that you have an estimate of spending versus income, you can choose how to budget. The two most common strategies are called Zero-Based Budgeting and the Fifty-Thirty-Twenty Method.
The Zero-Based Budgeting approach aims to allocate the entirety of each paycheck to certain specified tasks, with the goal of getting the total paycheck down to $0.00, according to Fidelity Bank.
For instance, under this plan, a dollar amount would be allotted to go into savings, a dollar amount to the electricity bill, a dollar amount to the mortgage, and so on. Zero-Based Budgeting works best if you’re looking for an austere plan with tight controls on spending, but the process can be time-consuming, and the results leave little money to be switched around in the case of emergencies.
The Fifty-Thirty-Twenty Method, on the other hand, involves breaking down each paycheck into percentages — 50 percent, 30 percent, and 20 percent, respectively. The usual strategy is to spend 50 percent on needed expenses like housing, bills, and food, 30 percent on wanted expenses, and 20 percent goes to savings or debt payments.
This strategy is especially beneficial if you have multiple jobs; instead of bringing individual, smaller paychecks down to zero, you can find the total sum of them and take the percentages from that. If you reside in a high-cost-of-living area, though, the Fifty-Thirty-Twenty method may not leave enough to pay for needed expenses, and that means you have less to put into the 30 and 20 percent.
Top tips
After deciding on which strategy you’ll use to budget, financial advisors have a few tips to help the process along. The biggest suggestion? Be flexible. The first few months on a new budget may seem tough, but adjusting and sticking to the plan will be better than abandoning it.
Another tip is to set goals for the budget. According to the University of Pennsylvania, the best budgeting goals are SMART, which stands for Specific, measurable, achievable, relevant, and time-based. A SMART goal can look like anything, but most often takes the form of a savings account objective; perhaps something like saving $1,000 by the end of the year.
With a goal in mind, budgeting often seems less tedious. After all, if you can clearly see yourself working toward a target, the benefit of the budget becomes significantly clearer.
If you’re having trouble paying those pesky bills, Britannica suggests automating the process. This can be set up through the service provider, and will set aside a small amount from your checking account to cover monthly invoices. Through your bank, you can do the same thing with savings; every paycheck, a bit will automatically go into your savings account as well as your checking account. This removes the temptation to spend every cent of a paycheck, and ensures that the necessary payments get made.
One final tip, as the roads become icy and the snow starts to fly: invest at least a little into an emergency fund. This money can be part of your savings account, but should only be spent in the case of a crisis — medical, mechanical, or other. Having an emergency fund helps take some of the stress out of a fall or crash, and can make sure your financial well-being doesn’t take as much strain.