From the Holiday Season to the New Year: The New You (on a Budget)

Are you looking for a resolution for 2009? How about resolving to improve your personal finances by curbing your overspending? Taking the time to build a personal budget will help you in the long run. Your self-discipline can slowly help you crawl out of the financial hole your previous financial habits have left you in. You can also acquire new habits that will give you greater spending power in the future.

According to a TrueCredit.com survey, in the 2008 holiday season 73 percent of American consumers plan to pay for their holiday expenses using cash and savings and 18 percent plan to use their credit cards.

Even if you are among the 73 percent of Americans who will not go into debt for holiday expenses in 2008, you probably will head into the New Year deep in debt. Once you finish your holiday spending, the winter season presents an ideal time to stay home and stick to your personal budget.

If achieving long-term financial stability interests you more than overspending and increasing your debt, make a New Year's resolution to begin 2009 with a realistic personal budget. If you've been putting off responsible budgeting, these five ideas can help you design a budget to live with:

1. Record all of your expenses on paper or on a computer spreadsheet. Be sure to include each expense that recurs at least once every year. For annual expenses like property taxes, you can use a simple strategy of dividing the total taxes by 12 months. The quotient will be how much one month of property taxes costs you. For all budget items, choose between using actual amounts or estimated amounts for expenses.

2. Slash unnecessary items from the budget. For example, you can cancel items like an unused gym membership.

3. Look for cost-savings. If there are some categories you must keep, you can reduce each item by researching alternatives. For example, if you shop at a wholesale club instead of your favorite premium grocery store, you might be able to drastically save on grocery expenses.

4. Compare your total expenses to your total income. You can use the difference for spending money or for personal savings.

5. When you go back to your budget, you can look for new ways to save on the variable costs. For example, you can find a cheaper cable provider.

New Year's Day can be your day to use the calendar as a catalyst for changing your finances and taking your first step toward financial independence.

Good luck with budgeting in this new year that is just around the corner. Making responsible choices will also give you more spending flexibility.