Don’t Like Your Budget? Restart it.
Budgets are not set in stone, so don’t be a captive to your money
I was looking at my income and expenses the other day, and I didn’t like what I saw. I was saving money for a planned trip, working on spending down my HELOC, and trying to figure out what to do with my side income from writing. Then I realized that my budget wasn’t working for me.
My income wasn’t correct. I’m not making an income and haven’t for the past two months, because of the pandemic. The income I am bringing in isn’t correctly reflecting this at all.
I also still had expenses that I wasn’t using anymore. I was saving for a new oven, which isn’t an option right now. I still had an expense category for my dog, who passed away last November. And that trip to Alaska we were saving for? Cancelled.
It was time I archived that budget and started a new one.
Budgets are flexible
Just as life changes, so does your budget. You aren’t always going to have a neat and tidy spread sheet of expenses for the rest of eternity, and your income is also going to fluctuate during the course of your life. You must stay flexible when managing your money.
Once you have been budgeting for a while, you can usually tell when you need to start over. Your budget will become more difficult. You may be shuffling money around more often. You may have a big life change and you need to step up a couple of things for yourself. Or, you may find that your budget is just outdated and doesn’t work for you anymore. Whatever it is, work with it immediately. If you need to, scrap it and start over. You aren’t a slave to your money or your budget. Manage it well, and your money will work well for you.
Savings is non-movable standard in your budget
The rule “Pay yourself first” should be a mantra that doesn’t budge in your budget. Whether you’re stashing away $20 or $200, either 1% or 20% of your income, you still need to pay yourself first. Even if you are in dire straits. Even if you can’t pay the car payment or you don’t have enough for food. Still put AT LEAST some money away for yourself before you pay bills. When you are struggling and you focus on making a tight budget for yourself — I mean, really tight, like down to the penny — you may be surprised how far your money can go after you pay yourself. I have most always been pleasantly surprised to find that even though I pay myself ten percent of my income into my savings, I manage to have enough towards paying bills and necessities.
Your “wants” are an illusion
You may think you need that shiny new car or a new pair of jeans, or you need to go out to eat because you’re too tired to make dinner.
There is a fine line between wants and needs. Maybe you need transportation to get to and from work, but do you really need that fifty thousand dollar luxury car, even if you can afford it right now? You’re hungry, but do you need to pay forty-five dollars for a meal, instead of making yourself something simple (and inexpensive) at home?
Since the pandemic and the lockdown, I’ve realized how much I really “need” and don’t need. I’ve found I don’t really need much at all. My budget has downsized so much because I’m not able to spend money. Being forced to take the road that leads to less spending has been an eye-opener. How much money do we really need? If it’s too much, maybe look at what you think you “need” and see if there’s a way to do without it, or find something alternative that isn’t going to break your bank.
Your goal is to live below your means — not above your means or even at your means. You will only live below your means when you pay yourself first and then live off the rest of your income in the best way possible.
It’s okay to start over on something that isn’t working for you
Nobody has ever said you need to stick with your first budget, or your second, or your twentieth. If your budget isn’t working for you, scrap it and start over.
You can use parts of your budget, or you can begin fresh and anew. It’s your budget — just like it’s your money. Do what you need to make it work for you. It might be the system you’re using isn’t working. Try different methods. Figure out if you like to keep it on your computer, or work with a budgeting app, or even if you want to keep an analog budget with good old pencil and paper. There is no wrong way. Whichever system works for you the best is the one you should use.
Your budget should be second nature
When you start a budget, it’s frustrating and feels limiting. It’s task heavy and it can even get a little personal. While you’re learning this habit, be kind to yourself. Your goal is to keep going with it, learn it and keep doing it every day. A little bit every day. Figure out the best and easiest way to manage your money. It’s a habit that needs to be ingrained in you, so that you don’t even think — like brushing your teeth at night before you go to bed. You just go and do it without thinking about it.
When you shift your mindset to seeing a budget is a fluid device, an ongoing and ever-changing way for money management, and you see it more as a way of continuously adjusting your income and expenses to work for you, then you will have an easier time managing your budget and your how you spend your money.