3 Times You May Want to Adjust Your Budget
There are three ingredients to a successful budget.
You might be familiar with planning your paycheck and tracking your transactions. But there’s one more special ingredient that can take your budget to the next level—adjusting.That’s right. You have permission to adjust your budget, even after you set it. It sounds like it’s against the rules, but hear us out.
"Life happens—even to the most dedicated budgeters."
Life happens—even to the most dedicated budgeters. And if you never gave yourself permission to make changes, you would probably get frustrated when something came up that altered your budget. You might have a hard time sticking to the original plan or making extra progress on your goals. You might want to toss in the towel altogether!
Nobody wants that!
Remember, the budget exists to serve you and your family. That’s why it’s okay to make some adjustments when necessary. You want to be consistent and stick as close to your plan as possible, but you also want to be willing to adapt to make your budget work for you!
Here are some scenarios where adjusting your budget is a good idea.
1. Your income changes.
If you’re self-employed or work on commission, you know how this goes. You do your best to predict your paycheck, but there might not be a guaranteed amount coming in on a regular basis. Or maybe you always know what your paycheck is, down to the last penny. But this month, you received an unexpected check or had to take time off without pay.
If this happens, the solution is simple. Adjust the income amount and check out what you have left to budget. Now all you need to do is tweak your categories to reflect your new budgeted total and you’re good to go! Yes, it’s that easy!
2. A utility bill arrives.
Unless you live in a place where water, electric and gas are included in your rent, you probably know what it’s like to plan for your utility bills. You may be pretty good at guessing, but you likely have to tweak the budget once the official bills arrive.
Most people make an educated guess on their utility budget and then round up, just to be safe. Let’s say you budgeted $120 for electricity. But the bill showed up, and wow—you only owe $98.76! As soon as you pay the bill, pop open the budget and adjust the amount you planned to reflect the amount you actually owed. Now you have an extra $21.24 to assign to another category.
3. You’re getting close to overspending in a category.
Sometimes the middle of the month arrives and you realize you didn’t budget enough for one of your categories—like groceries, entertainment or restaurants. Maybe you forgot to budget for your aunt’s birthday lunch and need to beef up the restaurant category so you don’t overspend. No worries. This happens!
Take a good, hard look at your budget. Maybe you have $300 left in your grocery budget but only need $200 to buy the rest of the ingredients you need for the month. Or perhaps you gave yourself $200 to spend on new clothes, but you already bought the items you wanted and have $30 left in the clothing category. Find categories like these and move the extra money into the category that needs a little more padding. That’s all there is to it!
And be sure to keep this in mind when you plan for the upcoming month! If you regularly overspend in a certain category, you might want to bump up the planned amount moving forward.
When it’s time to make your next budget, remember all three crucial ingredients: planning, tracking and adjusting. Don’t forget that last step! It’s your budget, after all, and its job is to work for you!
It’s okay to tweak the budget in the middle of the month. Life happens! And EveryDollar makes it easy. Create a budget today! It’s free to use and takes less than 10 minutes to set up.