The leaves are changing, the pumpkin spice lattes are flowing, and the Halloween movie marathons are in full swing. With summer behind and the major winter holidays around the corner, fall is the perfect moment to take a breath, sit down with your finances, and give your budget a once over.
Why Budget This Fall?
Budgeting is essential to do any season, of course. Still, there are a few reasons to revisit your budgeting strategy this fall.
- Seasonal resets. Like swapping summer outfits for cold-weather staples, reexamining your budget each season helps you revamp your money goals and address any financial thin spots.
- School stuff. For many, fall marks back-to-school season. It’s the perfect time to reassess and tweak your budget to accommodate school-related expenses, whether you’re a parent of a student or a student yourself.
- Holiday prep. Winter can be financially stressful as everyone gears up for big holiday spending. Setting up a budget in advance can make things like gift shopping and travel more manageable for you (and your wallet).
(Re)incorporate the 50/30/20 Rule
The 50/30/20 Rule is one of the most popular budgeting hacks out there. It uses percentages to break down your finances into three major categories:
- 50% for necessities. Things like your rent or mortgage payment, utilities, groceries, insurance premiums, and minimum loan repayment.
- 20% for savings. This category differs from person to person but usually includes things like an emergency fund, retirement fund, or major savings goals like a down payment on a home.
- 30% for wants. This part of your budget is free to spend as you like.
Everyone’s financial needs are unique, so while the 50/30/20 Rule is a helpful guide, it’s adjustable to your circumstances. For example, if your cost of living is high because of where you live, you may use 60% of your earnings rather than 50% to cover your necessities. Or you may dip into your savings or wants category if you have credit card debt you need to pay off.
Adjusting the 50/30/20 Rule for the Holiday Season
With big holiday spending just around the corner, your 50/30/20 Rule may need additional tweaks. While your necessities category won’t change much, your “wants” and “savings” categories might. Some items you may want to consider in your calculations include:
- Winter travel, including flights, car rentals, and accommodations.
- Holiday event prep, like fun outfits, tickets, gifts for hosts, or cover charges.
- Charitable donations—remember small bills for the Salvation Army bell ringers.
- Gifts, both homemade and store-bought.
- Winter sports, like ski resort passes or gear rental.
Polish Up Your Credit Score
For some, the summer season means slightly looser purse strings. And there’s nothing wrong with that—we all deserve a little indulgence! Now that the season is changing, it’s a good time to check in with a vital aspect of your financial health: your credit score.
A credit score is a number calculated by specific financial metrics, including the types of debt you owe, your repayment history, and how often you use a line of credit to pay for things. The better your credit, the more likely you will get approved for new loans and receive lower interest rates.
Prepare Your Credit Score for the Holidays
So, how can you boost your credit score before the holiday season sets in? Here are a few things to keep in mind:
- Adjust your fall budget to accommodate any lingering credit card balances or late payments (and remember to include any student loan repayments in your calculations).
- Hold off on closing or opening new lines of credit, as it can worsen your score.
- Apply to increase your credit card limit—this will lower your utilization percentage (or how often you use your credit card).
- Consolidate your credit card debt into a single amount and pay it all off simultaneously. Look for credit cards with zero transfer fees and lower rates for balance transfers.
Make Budgeting Easy With Financial Calculators
If budgeting by hand gives you the creeps, consider simplifying the process with online budgeting tools, like these financial calculators from Trailhead. They make it easy to figure out a budget that will work for your specific needs, whether for everyday spending and saving, paying off debt, or preparing for a big purchase. Try it for yourself >>