Well everyone a new year is now upon us and I must say that I am looking forward to 2012. I am not sure what this year holds for me just yet but I have a positive outlook with regards to everything, especially my finances.

I am always working on my budget and I give it a tweak or two every couple of months because I believe that a budget needs to change as your financial situation changes. This year I am using a combination of the rollover budget and the zero based budget to track my income and expenses over the whole year.

I will still use a monthly zero based budget where I have a certain amount set for each category and where total income will equal the total expenses for that month. I am also using a rollover budget, where any unused funds will roll over to the next month to form a base for the next month’s spending.

How to Create a Financial Plan for the New Year

img from quizzle.com

In my case I am using a hybrid of the two because my zero based budget will be tracked via spreadsheet (and a bit through Mint) but I will also allow any unused funds in each spending category to roll over to the next month. Everything will continue rolling over until the end of 2012 so that I can have a total figure for the year, as well as an average for each month.

I am mainly doing this because I want to have an idea of how much I really spend and bring in during one full year. I have been allowing Mint to reset my spending to zero every month but this did not give me a clear picture of what I really spent on gas, for example. There were some months the bill was below $50 and other months where it was above $50 but since I never kept a running total I am not sure what my average really was.

This rolling budget for one year should give me a better idea of what I actually spend and that should help when it comes time to tweak the budget for 2013!!!!

I know that many people will say you cannot combine the two types of budgets because you should have a zero at the end of the month for the zero based budget and a rollover budget implies that you did not reach zero. In my case I will be doing the zero based budget in my spreadsheet where I track all my receipts and will be applying the rollover to Mint.