Five Reasons to Tweak Your Budget

euros_growthOne of the staples of a good budget is to commit to revisiting it on a regular basis (quarterly is generally a good interval).

Reason being, is that while you are working on the business of paying down your debt and/or bulking up your savings,  you are carrying on the business of living your life. Your budget may or may not be working well, according to what is going on around you.

Things Change. So can Your Budget

One of the key ingredients to budgetary success is flexibility.

Recognize that there is often a difference between practice and theory. What may have seemed like a good idea on paper may not translate well (or bring you the results that you’d hoped for).

The important thing is to be open to change. Making adjustments is not admission of failure in planning. It is recognition that budget-setting (and its eventual success) is a fluid entity.

Rapid Fire Quiz

Take a good hard look at the plan you’ve laid out for yourself and ask yourself all kinds of questions. Is your budget working? Do your spending allocations make sense? Maybe you’ve been too rigid.

Have things changed, in terms of income? Maybe something has changed in your work situation? Have you come into unexpected money and/or spending?

Tracking Well

What kind of success have you had with tracking your expenses and spending? Maybe you’d left something out, or did not accurately record it, and thus are experiencing a shortfall on a regular basis- which is contributing to the vicious cycle of keeping budgetary success at bay.

Now is the time to see if you’ve hit the mark- and to see where you can improve specifically. Go line by line. Maybe you’ve underestimated your spending. Maybe you’ve not been able to sock away some emergency money- and have run into an emergency.

Whatever the case, have an honest look- and be proactive in making changes.

Align Your Goals with Your Daily Life

The danger with setting up too lofty a budget is that you are constantly going to run into trouble in the execution. You may be focusing too much on the long-term goal and not on daily practice. While your aspirations may be admirable, you may struggle to reach them, which may make you feel like a failure unnecessarily.

Tweak, tweak, tweak and amend your goals as necessary. While it may push your timeline out a little bit, you will still get there- and the stress of doing so will be alleviated.

Short Game vs. Long Game?

Speaking of goals, don’t always have your eyes way out on the horizon. Set shorter term goals, say for each quarter (like right around now, when you are revisiting the budget).

Instead of “I want to pay my debt down entirely”, for your shorter term goals, you could say, ‘I want to have a whole month of successful spending (i.e. stick to plan)” or “I plan to pay down this specific, smaller part of my debt,” or “I would like to save 10 percent of my income every month for this quarter.”

These little milestones contribute to the positive end result.