So everyone is telling you that it’s a smart idea to make a budget, right? You decide to follow their advice but what happens when you exceed your budget? It will probably happen sooner or later as life has a strange way of coming up with unpredictable circumstances. The only thing you can do it be prepared to adjust.
Don’t panic, everything that you go through is a learning experience and a lesson learned. A budget is essentially a guideline to your finances to keep you from over spending and enables you to save for whatever it is you want to save for. When you first establish a budget, sometimes a little revision is necessary as you see how your budget will stand, once put into effect. You must start somewhere and see how it goes but if ever the day comes when you exceed your budget, don’t freak out, here are some guidelines to help you.
- Find out what happened
In order to adjust your budget accordingly, you must first figure out why you were not able to stick to your budget. What was the overspending allocated to? Was it necessary? Some things we spend our money on such as food and utilities are variable expenses and can fluctuate from month to month. If you are constantly exceeding these budgets it may be wise to adjust your budget to better fit your spending. Maybe you told yourself you would eat out twice a month but ended up eating out five times. It is exceptionally easy to lie to yourself about your budget. If it happens once, it can be considered a slip up but if it continually happens than it is no mistake. You do not need to redo your budget, you just need to balance it out by cutting expenses elsewhere.
- Avoid unnecessary expenses
Having a budget means you cannot spend your money blindly on things that you do not need. After spending money on unnecessary things, you will wonder where all your money went and will have nothing to show for it. A waste right? If you are revising your budget, cut out what is not necessary such as restaurant outings and movie dates. It might get boring but staying in is the best way to save, as there are no temptations to spend your money. A good practice to get into is taking money out of your ‘leisure fund’ when you go over your budget. Overspent one month? Than take it out of next months leisure fund to balance it out.
- Reduce costs
Look into your cellphone, cable, Internet as well as any other service providers. Do you truly need everything that you have on your plans? The movie channel, call waiting, voicemail etc. Decide if everything you have meets your needs, perhaps you can cut some spending and reduce costs that way.
- Make plans
Instead of being spur of the moment when date night comes around, why not make some premeditated plans to keep spending to a minimum. Plan low cost activities on a more regular basis. Having a set time each week to plan your week out may help you find ways to keep spending to a minimum. Make plans, set goals and exercise your creativity.
If you are overspending on a monthly basis and cant seem to keep to your budget than you need to make a permanent change. Look at your budget and where your money is going to see what you are actually spending on as well as how you can fix it. One of the most important things to avoid is cutting down the amount you put into your saving each month. You have achieved a goal, do not sway from it because you spent too much on yourself or anything else, that savings account was established and put into effect for a reason. Instead of cutting into your savings when other things become more expensive, see where you can cut down in other categories. No one said budgeting would be easy, but it is definitely worth it.