5 Ideas for Setting Up a Budget for 2021

The new year offers a powerful opportunity for a fresh financial start. Whether you’re recovering from setbacks or simply want more control over your money, knowing how to start a new budget is your first step toward financial peace of mind.

Many people think financial success only comes from making more money, but in reality, it starts with managing what you already have. Budgeting empowers you to take charge of your finances and build a secure future.

And if the unexpected happens? Tennessee title loans can offer support when emergencies threaten to derail your plans.

1. Review Your Expenses

Here are two questions you must ask yourself before you even start drawing up your budget:

1) What did you spend the most money on in the last year?

2) What could be cut?

Obviously, expenses like rent and utilities cannot be cut down on (unless you move – which, maybe it’s worth looking into?), but expenses like groceries, takeout, subscription services can.

Your budget should keep you from spending money on stuff like extra food that will go bad in the fridge, ordering takeout when you could cook for yourself, and spending money on HBO when you only got it for Game of Thrones in the first place. Declutter your spending before setting up your new budget.

2. Set Financial Goals

What is it that you want to achieve with the money you have? This is the stage you decide how to divide your money in a way that allows you to comfortably achieve your goals for the year. It should include both serious stuff (like sinking funds for car maintenance and home repairs) and fun activities (vacations, family activities), as well as more long-term goals (savings, contribution to your IRA, etc.)

Basically, you take the income you’re working with – and divide it into categories for each payday. You take care of stuff like rent, utilities, and groceries first, and then move onto other goals depending on your priorities. The more ground you cover at the beginning of the year, the less you’ll have to scramble and re-adjust the budget later.

3. Build an Emergency Fund

But whatever your priorities are the first and foremost should be setting up your emergency fund. This is what should save you down the line if you’re hit by a big unexpected expense that cannot be solely covered by the sinking fund.

We’d recommend the emergency fund be enough to comfortably cover at least a month of your expenses. But most would say they consider themselves “safe” when the fund is enough to cover at least 3 and optimally 6 months of expenses – so that’s what you should aim for in the long run (in which case the funding process will likely last for more than just next year).

4. Give Yourself Flexibility

Don’t make your budget too rigid. This is where most budget-makers fail – they blow holes in their too-rigid budgets and decide it’s not for them. The thing is, you can’t change your spending habits overnight, even if you know where you’re making the mistake. If you spend $600 on groceries monthly, it’s unrealistic to expect yourself to cut down to $250 from the get-go – even if it’s doable.

Work to align your spending habits with what you can afford, but try to find the middle ground you know you can work with.

5. Have a Plan B for Emergencies

Financial emergencies can be tough – especially if your emergency fund isn’t fully funded yet. This is the kind of thing that derails the budget and derails it fast.

Know your options: where and how can you get emergency cash fast? There are multiple options, some easier and quicker than others. For example, if you’re a car owner you could try taking out a title loan.

Use Title Loans When You Need Fast Cash

Title loans are ideal for urgent situations when time is critical. If you own your vehicle and have a lien-free title, you may qualify easily, even with poor credit.

How it works:

1. Apply for a title loan online in Tennessee.
2. A loan representative will call you and schedule an appointment.
3. Bring your car, ID, and title for a quick inspection.
4. Get approved and walk away with up to $2,500 in emergency cash, sometimes in just 30 minutes.

Requirements:

• Valid government-issued photo ID
• Lien-free vehicle title in your name
• Your vehicle for inspection
• Proof of income

Start the Year with Confidence

Starting a budget isn’t just about saving, it’s about building a life that feels secure and intentional. These budgeting tips can guide you through the year ahead.

And if life throws you a financial curveball, know that online title loans from Tennessee Title Loans, Inc. can offer the quick support you need to stay on track.

Emergency cash solutions available today, because financial freedom begins with a plan, and a little help when you need it most.

Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.