Raise your hand if you’re with me on this:
How many times have you found yourself feeling defeated to realize that you’ve gone over your grocery budget –again? If you’re like me, then you know how frustrating a failing budget can be after you’ve spent countless hours poring over calculations for your household’s monthly expenses.
A working budget could very well be one of the secrets to sanity and peace of mind for households. Besides making sure that we have enough allocated to cover all our basic necessities every month, it also helps us ensure that we’re also putting enough money in the right places for our longer-term plans, whether it’s for a family trip next year or a downpayment for a new car that you and your partner are thinking of getting.
Yet, we all pretty much know that creating a budget for the family is only the tip of the iceberg; making sure that it’s actually working is the bigger challenge. It’s easy to get discouraged when the budget you’ve spent hours putting together is not working out the way you had planned. But I can guarantee you that it is possible to fix a failing budget.
So, why exactly are you spending more than what you’ve budgeted? Here are the top reasons why your budget isn’t working and down below are tips that can help you fix it!
Your budget is unrealistic
You may have thought you got it all covered: You’ve put in enough amount for unexpected, miscellaneous expenses. You’ve made sure all monthly expenditures are accounted for, and you’ve even put in enough extra dollars to cover inflation and the occasional rise in prices. But take a look again and you may realize that you may have cut everything down to a minimum. Is a budget of $150 on weekly groceries truly realistic? If not, adjust it.
You aren’t tracking your expenses properly
You may have failed to properly track how much we’re spending on things especially items that are variable such as utilities and food. A budget is not set in stone, which means that it changes, and part of making sure that it works is to be aware of how much you’re spending on certain things.
If it helps you, use money apps like Mint. It is an all-in-one resource for creating a budget, tracking your spending and getting smart about your money. Mint is designed to help you keep track of your finances more conveniently in one place–without logging in to multiple sites.
You tend to impulse buy
Obviously, if you tend to overspend or impulse buy, chances are you’ll find it difficult to follow through your budget. There is no other solution to this except to simply stop buying things that aren’t on your list or things you’ve not budgeted for.
You are not prepared for the unexpected
Do you have money for leaky roofs, flat tires or dental emergencies? This is where your emergency fund should come in to save the day. If you don’t have money to cover for the rainy day bills, your budget is bound to fail when you are faced with a financial emergency.
There could be a dozen other reasons why your budget is failing and it’s important to figure out what they are so you can address the critical pain points.
TIPS TO PREVENT OR FIX A FAILING BUDGET
Now, the next major challenge is how to make sure that your failing budget does not go into a downward spiral.
- Make sure that your partner is on board. You may not be able to keep track of everything, so find someone to help you do it, and there’s no other perfect person for the job than your partner, who should be on board the whole budget you’ve set in the first place. If part of the reason why your budget fails is because of spending triggers, then it’s good to have your spouse serve as your accountability partner, someone who will hold you accountable for your spending habits especially those spur-of-the moment expenses.
- Be more flexible with expenses that fluctuate. Regularly tracking your expenses will give you an idea of how much and how often the prices of variable items such as gas, food, and utility fluctuate. Use this information then to make the necessary changes to your budget when circumstances change. You can try a seasonal budget, one that makes allowances for certain items that cost more during summer or winter, for instance.
- Double-check your miscellaneous list again. And your emergency fund, too. How many times has this happened to you: A major bathroom leak necessitated calling in the plumber and you having to fork out several dollars for the job. Turns out though there isn’t enough money left in the emergency fund jar so we take a few dollars from next week’s grocery money instead.
While emergencies are difficult to predict and therefore equally difficult to say how much we should be allocating, it’s essential that there’s always enough funds for them. So, take a look again at how much you’re putting in for emergencies and unexpected expenses – or if they’re even in your budget. If not, then it’s high time you get these items on your list, too!
- Make space for some fun money. Summer was a blast and you decide to host a barbecue party to close the season. But wait, was there an item for “summer party” in your budget? Most likely not, and this is what most of us keep forgetting when we talk about budget: a budget is for both bills and expenses – and a party is an expense.
Having a budget does not mean foregoing all the fun; in fact, it’s been found that the more we don’t budget for entertainment, the more likely people end up spending on unnecessary entertainment. Try to allocate a (very) small portion of your monthly income for the pursuit of fun things, but make sure you don’t spend more than what you’ve budgeted.
- Check for items where you might be spending beyond your means. You spent a hundred dollars for a Halloween costume this year. But is this expense something that could have been prevented or kept to a minimum? Very likely yes. Making sure that our budget works also entails making the lifestyle choices that allow us to live within our means. A good thorough search in last year’s Halloween box or a weekend afternoon at a thrift store would have cut down by half the money you spent on Halloween costumes.
Finally, give your budget time to actually work. I know we’re all eager to know how we’re doing or see how much we’ve saved or how successful we have been at making sure our grocery spending stays within our limit. But the reality is that prices may fluctuate before you know it and you’ll need to tweak your budget again. Don’t rush and don’t get discouraged when this happens. A budget is never supposed to be perfect all the time – it just has to work!