Updated August 2026

How to Build a Better Budget This Year

A new year is a good time to check in on your financial plan. Taking a little time now to review your budget can help set you up for both short-term and long-term success. Here are five simple steps to help make sure your plan is working for you.

1. Identify Your Long-Term Financial Goals

Long-term financial goals could include anything from buying a home to saving for retirement. Take a moment to think about what matters most to you in the future; it will help you see what you're really saving for.

2. Identify Your Short-Term Financial Goals

Are you planning a family vacation this summer? Write down what you want to do over the next year, and prioritize the list. Turning these into line items in your budget makes them easier to actually reach.

3. Review Your Current Process

Look back at the last year of your spending and saving habits, and check whether you made steady progress toward your goals. If not, it's a good time to adjust. Don't worry if you're not on track yet that's normal. Reflecting on what worked and what didn't is how you build a better process going forward.

4. Create Your New Financial Plan

Sort your goals into needs and wants, and decide what matters most in the short term and long term. Then calculate what's left after your monthly bills, rent or mortgage, utilities, food, and other regular expenses. Put what remains toward your goals, starting with the ones that matter most.

An example monthly budget might look like this:

Income: $3,500
Rent: $1,400
Utilities: $150
Transportation: $400
Insurance: $400
Food: $500

Savings (from the remaining $650):

Retirement: $350
Yearly vacation fund: $150
General savings: $150

5. Tweak Your Plan

If you notice more room in your budget some months, consider putting more toward your goals. It's easy to see extra cash at the end of the month and want to spend it, but directing more toward your priorities gets you to your long-term goals faster. It's still important to enjoy yourself along the way; just make sure your spending lines up with your overall plan.

If you're building your plan around a predictable paycheck, the Perpay Marketplace uses automatic payments from your payroll direct deposit, which can make it easier to stick to a budget you've already set.

Perpay does not provide financial, legal, or regulatory advice. The content is for general informational purposes only. Any views expressed are those of Perpay, not its partner institutions. We do not endorse or guarantee the accuracy of any linked third-party information. Links to Perpay products are advertisements. All external brand names belong to their respective owners.

Budget Better in 2020