Creating and sticking to a budget is one of the best ways to manage your money. However, it’s crucial that your budget matches your lifestyle. It’s important to make sure that the budget you’ve laid out adapts to any changes in your circumstances.
Here are four reasons to revisit your budget this month:
Your goals have changed.
Think back to when you set up your budget: what were you hoping to achieve? If your current goals don’t match what you were aiming for when you created your financial plan, it might be time to make some changes.
For example – did you lay out your budget in hopes of starting a savings account? Paying off a credit card? If you’ve accomplished your set task, what’s next? Think about what you’d like to work toward over the next few weeks, months, or year – and arrange your budget accordingly.
You just can’t stick to it.
Don’t be too hard on yourself if you’re struggling to stick to your budget – you’re not a lost cause! The biggest mistake people make when budgeting is not being realistic. The key is to figure out where you’re going off track and adjust your budget accordingly. If you can’t go without your latte-a-day, try working it into your budget, to begin with. Or, if you notice that miscellaneous expenses – birthday gifts, etc. – seem to pop up every month, account for them right from the start.
Set yourself up for success, rather than failure.
You have new responsibilities
New responsibilities often lead to changes in either income or expenses (or both). For example, if you’ve taken on a new job, you’ll need to manage that difference in income. On the flip side, if you’ve begun paying your own phone bill, that added monthly expense needs to be accounted for. As your life changes – and it will – so will your financial situation.
You might not be saving as much as you could be.
Saving money might not be as glamorous (or fun) as spending money, but it’s one of the smartest things you can do – no matter your financial situation. Take a look at your current budget and be honest with yourself: is there is any additional saving you can manage? Start small and simple. If you notice that you’re going out to eat 4 times a week, try cutting back to 3. Or, if you find that anything leftover at the end of the month goes to clothes or coffee, try diverting some of that to your savings account.
The truth is, your budget should be a flexible entity. After all, it’s main purpose is to help you manage your finances according to your situation and lifestyle. As that changes, your budget will need to evolve to better fit your needs. Revisit it regularly!
Learn more about budgeting basics from The College Student’s Guide to Budgeting.