If you’ve ever gotten to the end of a month and wondered where all of your hard-earned money went, it’s probably time to revisit your budget. Living with a budget allows you to understand where your money is going, and to use this information to change your habits and plan for the future. But what happens if you’ve made your budget, and you’re still left with nothing month after month?
1. Your numbers are unrealistic:
On paper, it may look great to give yourself tight limits for entertainment and discretionary spending. But if your budget is stifling you to the point where you’re frustrated and consistently overspending anyways, it’s time to rework your numbers. Analyze your previous few month’s spending habits and arrive at a budget that is reasonable (while still cutting back).
If you’re a chronic over-spender, don’t cut back too quickly. Start with higher numbers (within reason) and work yourself down each month little by little to more reasonable levels. That way, you won’t experience an immediate shock that may cause you to quit before you even get started.
2. You forget to budget for holidays and events
Birthdays, Christmas, and other big holidays and events shouldn’t surprise you -- they happen at the same time every year (and should be included in a budget.) Create an event calendar and set an estimated budget for each occasion. But don’t forget those events that don’t occur on a regular schedule, such as weddings and baby showers. As soon as you receive a new invitation, add it to the list, along with expected costs. Use this calendar to set you budget so that you’re saving for each event in advance.
Take it a step further by adding other “event” budgets to the calendar, such as dental checkups every nine months, license plate registration every year, and yearly subscription renewals. These are foreseeable expenditures and should never be treated as emergencies.
3. Your system isn’t working for you
There are hundreds of different budgeting systems: some use only cash or only cards; some track every single dollar and some work with broader categories; some track on a weekly or even daily basis, and some track monthly. You can keep track on paper, using a spreadsheet, or even by downloading different software. With so many options, there could be some trial and error while you decide which system will work best for you.
If you’ve chosen a system that doesn’t work for you, it may feel like too much work to start over again, but don’t let that stop you. By allowing yourself to put in the initial time and research to find your match, you will see results, but sticking with a system you hate will only lead to failure.
If you hit a bump on the road to a balanced budget, don’t give up! Take a step back and decide if the budget you’ve created is reasonable and allows enough breathing room. Remember to plan for your upcoming occasions and events in advance. If things still aren’t clicking, try out different budgeting systems until you find the one that works. A solid, well-maintained budget will allow you to be prepared for whatever the future may hold, and it’s worth the time to get it right.
The CESI Team is committed to helping you reach your financial goals. If debt keeps you from living the life you dream of, contact us for a free debt analysis today and get started on the road to a brighter future!
Consumer Education Services, Inc. (CESI) is a non-profit service provider of comprehensive personal financial education and solutions for all life stages and for all of life’s milestones. Our goal is enhanced economic security for everyone we serve.
CESI is NOT A LOAN COMPANY